Dang, M., Nguy, N.V., Mazuren, M., Puwanenthiren, P. and Nguyen, N.T. 2021. Global Policy Uncertainty and Cross-Border Acquisitions. The Quarterly Review of Economics and Finance. 80, pp. 224-235. https://doi.org/10.1016/j.qref.2021.01.020
| Title | Global Policy Uncertainty and Cross-Border Acquisitions |
|---|---|
| Type | Journal article |
| Authors | Dang, M., Nguy, N.V., Mazuren, M., Puwanenthiren, P. and Nguyen, N.T. |
| Abstract | Policy uncertainty has been documented to have a significant impact on corporate investment decisions. This paper investigates the effect of policy uncertainty on cross-border acquisitions. We find a significant monotonic relationship between the size of the acquired equity stake in a target firm and the level of policy uncertainty in the target’s country of origin. More specifically, the acquirer is less inclined to purchase a sizeable ownership stake in the target firm, if the target is domiciled in unstable macroeconomic environment. Moreover, we find that acquirers are less willing to pay in cash if the target faces high policy uncertainty. The above results do not seem to depend on the quality of the country’s institutional environment and are robust to alternative econometric specifications. Our study discusses policy implications and should be of interest to academics as well as finance practitioners. |
| Keywords | Policy Uncertainty |
| Corporate Acquisition | |
| Cross-Border Acquisition | |
| Investment | |
| Journal | The Quarterly Review of Economics and Finance |
| Journal citation | 80, pp. 224-235 |
| ISSN | 1062-9769 |
| Year | 2021 |
| Publisher | Elsevier |
| Accepted author manuscript | License CC BY-NC-ND 4.0 File Access Level Open (open metadata and files) |
| Digital Object Identifier (DOI) | https://doi.org/10.1016/j.qref.2021.01.020 |
| Publication dates | |
| Published online | 13 Feb 2021 |