Do state visits affect cross-border mergers and acquisitions?

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

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.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Hao, Mr Zhiwei and Verwijmeren, Professor Patrick and Vagenas-Nanos, Professor Evangelos and Aleksanyan, Dr Mark
• Authors: Aleksanyan, M., Hao, Z., Vagenas-Nanos, E., and Verwijmeren, P.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Journal of Corporate Finance
• Publisher: Elsevier
• ISSN: 0929-1199
• ISSN (Online): 1872-6313
• Published Online: 30 November 2020
• Copyright Holders: Copyright © 2020 The Authors
• First Published: First published in Journal of Corporate Finance 66: 101800
• Publisher Policy: Reproduced under a Creative Commons License