Do state visits affect cross-border mergers and acquisitions?

Aleksanyan, M.; Hao, Z.; Vagenas-Nanos, E.; Verwijmeren, P.

Abstract

This paper studies the relation between state visits and cross-border merger and acquisition (M&A) activity. Based on 1161 state visits and 11,531 cross-border acquisitions, we find that corporations from visiting countries are more likely to acquire corporations in countries hosting the visit. Domestic acquisitions in the host country or M&As with non-visiting countries are not elevated. Evidence from instrumental variable analysis points towards a causal effect of state visits on M&A activity. Further analysis shows that the elevated M&A activity originating from visiting countries can be attributed to business networking and a reduction in investment uncertainty and cultural barriers.

Citation

Aleksanyan, M., Hao, Z., Vagenas-Nanos, E., & Verwijmeren, P. (2021). Do state visits affect cross-border mergers and acquisitions?. Journal of Corporate Finance, 66, Article 101800. https://doi.org/10.1016/j.jcorpfin.2020.101800

• Journal Article Type: Article
• Acceptance Date: Nov 19, 2020
• Online Publication Date: Nov 30, 2020
• Publication Date: 2021-02
• Deposit Date: Sep 9, 2021
• Journal: Journal of Corporate Finance
• Print ISSN: 0929-1199
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 66
• Article Number: 101800
• DOI: https://doi.org/10.1016/j.jcorpfin.2020.101800
• Public URL: https://durham-repository.worktribe.com/output/1241033