Economic policy uncertainty and cross-border mergers and acquisitions
Paudyal, Krishna and Thapa, Chandra and Koirala, Santosh and Aldhawyan, Sulaiman (2021) Economic policy uncertainty and cross-border mergers and acquisitions. Journal of Financial Stability, 56. 100926. ISSN 1572-3089 (https://doi.org/10.1016/j.jfs.2021.100926)
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Abstract
We examine the effects of economic policy uncertainty (EPU) on cross-border mergers and acquisitions (CBAs). The results show that a higher degree of EPU at home retards the number and volume of inbound CBA deals. However, this effect is positively moderated by the host country’s better quality of institution, business environment and political risk. The bilateral acquirer-target country-pair investigation reveals that while higher EPU in the target’s domicile deters inbound CBAs, higher EPU in the acquirer’s nation is positively associated with a higher number and volume of outbound CBA deals. Finally, on the announcement of the deals, targets (acquirers) based in countries with a larger increase in EPU are associated with lower (more) stock returns than the targets (acquirers) based in countries with a smaller increase in EPU. These findings imply that countries aiming to attract cross-border investments should strive to mitigate economic policy-related uncertainties.
ORCID iDs
Paudyal, Krishna ORCID: https://orcid.org/0000-0002-0372-304X, Thapa, Chandra ORCID: https://orcid.org/0000-0001-8661-8079, Koirala, Santosh and Aldhawyan, Sulaiman;-
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Item type: Article ID code: 75913 Dates: DateEvent31 October 2021Published31 July 2021Published Online2 February 2021AcceptedSubjects: Social Sciences > Commerce > Accounting
Social Sciences > FinanceDepartment: Strathclyde Business School > Accounting and Finance Depositing user: Pure Administrator Date deposited: 24 Mar 2021 12:48 Last modified: 08 Sep 2024 00:58 Related URLs: URI: https://strathprints.strath.ac.uk/id/eprint/75913