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- Publisher
- Wiley
- Copyright
- Copyright © 2013 International Review of Finance Ltd
- ISSN
- 1369-412X
- eISSN
- 1468-2443
- DOI
- 10.1111/irfi.12008
- Publisher site
- See Article on Publisher Site
Abstract
We examine whether corporate governance differences affect firm valuation in cross‐border mergers. We find that takeover premiums are decreasing in the quality of the foreign acquirer's home country governance for deals completed with stock, suggesting that the acquirers compensate target shareholders for the resulting exposure to inferior corporate governance regimes. Correspondingly, we find that the acquiring firm stockholders' abnormal returns at the merger announcement are increasing in the quality of corporate governance for stock offers. Finally, we find that foreign acquirers from countries with better corporate governance are more likely to make stock offers.
Journal
International Review of Finance – Wiley
Published: Sep 1, 2013