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Title: Investor reactions to international acquisition announcements.
Authors: Nguyen Thi, Van Thanh.
Nguyen, Phuong Huyen.
Mai, Quoc Bao.
Keywords: DRNTU::Business::Finance::Mergers and acquisitions
Issue Date: 2011
Abstract: This study aims to examine the impact of cultural distance and corporate governance mechanisms on investors’ reactions to cross-border acquisitions. We base our study on a sample of 279 acquisition deals performed by publicly listed U.S. firms over 10 years. Our regression results indicate that improving certain aspects of corporate governance,namely proportion of equity ownership by inside/independent directors, will lead to more positive abnormal returns. However, there is insufficient evidence to conclude any relationship between proportion of independent director/ independence of chairman and investors’ reactions. There is also no significant evidence to conclude a relationship between cultural distance and investors’ reactions. However, various interaction terms between cultural distance and corporate governance mechanisms show significant coefficients in the regression model. Specifically, the presence of an independent chairman and the proportion of equity held by inside/independent directors appear to mitigate the negative relationship between investors’ reactions and cultural distance between the U.S. and the countries of the target firms.
Rights: Nanyang Technological University
Fulltext Permission: none
Fulltext Availability: No Fulltext
Appears in Collections:NBS Student Reports (FYP/IA/PA/PI)

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