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Title: The 2007–2008 Global Financial Crisis, and Cross-border Mergers and Acquisitions: A 26-nation Exploratory Study
Authors: Reddy K.S.
Nangia V.K.
Agrawal, Rajat
Published in: Global Journal of Emerging Market Economies
Abstract: Many interdisciplinary studies of the 2007–2008 global financial crisis examine the causes of crisis, corporate governance and firm value, stock market efficiency, new firm registration, macroeconomic performance, and compare this crisis to previous crises. However, we do not find conceptual (empirical) studies that study foreign mergers or acquisitions with respect to the financial crisis. In this exploratory study, we perform an investigation using the UNCTAD’s dataset of worldwide cross-border mergers and acquisitions (CB-M&As). We select 26 countries and employ the adjusted event-study method to find significant difference between the means of pre-crisis period (2004–2006) and post-crisis period (2008–2010) for both sales and purchases in three variables, namely, number of deals, deal value, and average deal value. Our results show that the 2007–2008 global financial crisis has negatively affected both CB-M&A sale and purchase transactions all over the world from 2008 to 2009. We found, however, that after the crisis period, emerging market countries have taken advantage of the attractive asset prices in developed countries and increased their foreign acquisitions. Lastly, we offer “crisis-related CB-M&A propositions” that would facilitate future hypotheses testing, empirical studies, and policy-making research. © 2014, © 2014 Emerging Markets Forum.
Citation: Global Journal of Emerging Market Economies (2014), 6(3): 257-281
Issue Date: 2014
Publisher: SAGE Publications Ltd
Keywords: cross-border mergers and acquisitions
foreign acquisitions
developed economies
emerging economies
event study
foreign direct investment
Global financial crisis
ISSN: 9749101
Author Scopus IDs: 55601633800
Author Affiliations: Reddy, K.S., Indian Institute of Technology (IIT) Roorkee, Department of Management Studies, Roorkee, Uttarakhand, India
Nangia, V.K., Indian Institute of Technology (IIT) Roorkee, Department of Management Studies, Roorkee, Uttarakhand, India
Agrawal, R., Indian Institute of Technology (IIT) Roorkee, Department of Management Studies, Roorkee, Uttarakhand, India
Funding Details: Authors sincerely thank the Editors, Editorial Board and anonymous referees of Global Journal of Emerging Market Economies for their helpful comments and suggestions on the earlier version. The first author of this article (K.S. Reddy, Doctoral Student of Ph.D. program [self-finance category]) express his gratitude to Ganesh Reddy, Prashant Kiran and Jones, Alluri Satyanarayana, Vasu Kiran, Bandi Yogi Reddy, Vadicherla Koti Reddy, Bandi Harinarapa Reddy, M. Suresh Reddy, Virendra Balon, Kottala Sriyogi, A. Dalpathi, Naveen Srivastava, Baliwada Kiran, and Vemparala Sivafor their ad hoc financial support to complete his doctoral research at the campus—IIT Roorkee. He is also grateful to Punjab National Bank (IITR branch) for providing short-term educational loan. This paper is produced from Reddy’s doctoral work (2010–2014). All remaining errors are the responsibility of the authors. The usual disclaimer applies.
Appears in Collections:Journal Publications [MS]

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