Macroeconomic Change, and Cross-Border Mergers and Acquisitions: The Indian Experience, 1991-2010

Reddy, Kotapati Srinivasa

doi:10.2139/ssrn.2680099

Cited by 6 publications

(8 citation statements)

References 117 publications

(101 reference statements)

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“…The participation of India in the world economy has grown in recent years, due to changes provided by economic, financial and banking reforms. These events provided a closer economic growth to China's economy (Reddy, 2015).…”

Section: Resultsmentioning

confidence: 99%

Capital Structure of Brazil, Russia, India and China by Economic Crisis

Silva

Santos

Perobelli

et al. 2016

RAM, Rev. Adm. Mackenzie

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Este artigo pode ser copiado, distribuído, exibido, transmitido ou adaptado desde que citados, de forma clara e explícita, o nome da revista, a edição, o ano e as páginas nas quais o artigo foi publicado originalmente, mas sem sugerir que a RAM endosse a reutilização do artigo. Esse termo de licenciamento deve ser explicitado para os casos de reutilização ou distribuição para terceiros. Não é permitido o uso para fins comerciais. C C 105 • RAM, REV. ADM. MACKENZIE, 17(3) • SÃO PAULO, SP • MAIO/JUN. 2016 • ISSN 1518-6776 (impresso) • ISSN 1678-6971 (on-line) • http://dx.capital stRuctuRe of bRazil, Russia, india and cHina by economic cRisis 106 • RAM, REV. ADM. MACKENZIE, 17(3), 105-131 • SÃO PAULO, SP • MAIO/JUN. 2016 • ISSN 1518-6776 (impresso) • ISSN 1678-6971 (on-line) • EDILSON DOS SANTOS SILVA • JOSETE FLORENCIO DOS SANTOS • • FERNANDA FINOTTI CORDEIRO PEROBELLI • WILSON TOSHIRO NAKAMURA • ABSTRACTPurpose: Verify the effects of the subprime mortgage crisis on firms with different debt levels. Originality/gap/relevance/implications: The study contributes to the literature by examining the financial capital structure of emerging market companies in a context of crisis, in addition to using a robust econometric tool -the quantile regression. Key methodological aspects: In this work, the quantile regression was used as an analysis tool, and this technique allowed to observe the impacts of the crisis not only in the average level of indebtedness of companies, but also in its extreme values. Therefore, this work is characterized as descriptive, and the analyzed relations are quantitative. Firms were analyzed in Brazil, Russia, India and China. Summary of key results:The results indicate financing strategies, according to the theories of Pecking Order and Trade-off as regards to the level of debt. Key considerations/conclusions: The survey concluded that firms have different financing strategies even in the same country. Thus, the financial performance of firms would be influenced by economic conditions in the country, as well as the existing debt level in each company.

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Section: Resultsmentioning

confidence: 99%

Capital Structure of Brazil, Russia, India and China by Economic Crisis

Silva

Santos

Perobelli

et al. 2016

RAM, Rev. Adm. Mackenzie

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“…Indian market offers a great deal of market opportunities and invites multinational companies to invest in the country for both economic progress and financial integration with the world economy. Two notable incidents support this, first, the 1991 new economic policy reforms, and second the contribution of the service sector to the economy, largely information technology industry (Reddy et al , 2011, 2015a). In particular, the market that has a significant potential and higher growth in the service sector is telecom business (at the time of Vodafone acquisition; also see the Appendix, for telecom market indicators).…”

Section: Analysis Of Sample Casesmentioning

confidence: 99%

The causes and consequences of delayed/abandoned cross-border merger & acquisition transactions

Reddy

Xie

Huang

2016

JOCM

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Purpose Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with an emerging economy – India, such as Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal in the oil and gas exploration industry. The study intends to explore how do institutional and political environments in the host country affect the completion likelihood of cross-border acquisition negotiations. Design/methodology/approach Nested within the interdisciplinary framework, the study adopts a legitimate method in qualitative research, that is, case study method, and performs a unit of analysis and cross-case analysis of sample cases. Findings The critical analysis suggests that government officials’ erratic nature and ruling political party intervention have detrimental effects on the success of Indian-hosted cross-border deals with higher bid value, listed target firm, cash payment, and stronger government control in the target industry. The findings emerge from the cross-case analysis of sample cases contribute to the Lucas paradox – why does not capital flow from rich to poor countries and interdisciplinary M&A literature on the completion likelihood of international takeovers. Practical implications The findings have several implications for multinational managers who typically involve in cross-border negotiations. The causes and consequences of sample cases would help develop economy firms who intend to invest in emerging economies. The study also offers some implications of M&A for telecommunications and extractive industries. Originality/value Although a huge amount of extant research investigates why M&A fail to create value to the shareholders during the public announcement and post-merger stages, there is a significant dearth of research on the causes and consequences of delayed or abandoned national and international deals. The paper fills this knowledge gap by discussing an in-depth cross-case analysis of Indian-hosted cross-border acquisitions.

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“…On the other hand, negotiation or transaction cost for cross-border deals is significantly higher than the cost for domestic deals due to international setting and border laws relating to taxation, legal fee and investor protection (Barkema & Schijven, 2008;Boeh, 2011;Chen, Huang, & Chen, 2009;Geppert, Dörrenbächer, Gammelgaard, & Taplin, 2013;Reddy, Nangia, & Agrawal, 2014a;Reddy, 2015cReddy, , 2015d. In particular, they "trigger additional taxation of the target's income in the form of non-resident dividend withholding taxes and acquirer-country corporate income taxation" (Huizinga, Voget, & Wagner, 2012).…”

Section: Theoretical Backdrop: Cross-border Mandasmentioning

confidence: 99%

“…For example, horizontal mergers aimed at creating monopolies during , dominated the first European merger wave; the second merger wave led to increase vertical mergers or vertical integration during [1919][1920][1921][1922][1923][1924][1925][1926][1927][1928][1929]; the third merger wave considered for the period 1950-1960 that aimed at creating large conglomerates while expanding the businesses in the form of diversification; the fourth merger wave (1983)(1984)(1985)(1986)(1987)(1988)(1989)) discovered new forms of consolidation, i.e. hostile takeover bids and leveraged buyouts in which the development was due to technological progress in biochemistry and electronics, as well as the creation of new financial instruments and markets (e.g., the junk bond market); the fifth merger wave (1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000) emerged the new term "cross-border mergers and acquisitions" due to globalization, economic boom, stock markets development, foreign direct investment and other initiatives (e.g., financing international deals), and growth in internet and telecommunications sector (Goergen & Renneboog, 2004;Gray & McDermott, 1987;Gugler, Mueller, Yurtoglu, & Zulehner, 2003;Huang, Hu, & Chen, 2008;Kang & Johansson, 2000;Martin & Sayrak, 2003;Nagano, 2013;Reddy, 2015c;Weston, Chung, & Hoag, 1998). Further, the sixth merger wave (2003-present) is largely motivated by lower asset valuations and global financial crisis embarked in the 2007 (Alexandridis, Mavrovitis, & Travlos, 2012).…”

Section: Theoretical Backdrop: Cross-border Mandasmentioning

confidence: 99%

Determinants of Cross-Border Mergers and Acquisitions: A Comprehensive Review and Future Direction

Reddy

2015

SSRN Journal

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The purpose of this paper is to review and summarize earlier studies analyzing the determinants of cross-border mergers and acquisitions (M&As). We primarily describe the motives of cross-border acquisitions and present the market performance for corporate control transactions over the period 1994-2013. Then, we illustrate the factors affecting cross-border investments and acquisitions in various taxonomies, namely deal-specific factors, firm-and industry-specific attributes, organizational learning and prioracquisition experience, and country-specific factors. We draw special attention to the country-specific taxonomy for various reasons include economic and financial markets environment, institutional and regulatory framework, political situation (including corruption), tax system, accounting and valuation matters, geographical factors and cultural issues. We also provide a synopsis of earlier studies addressing the diversification motive in M&A decision. We thus propose that a host-country's institutional laws and regulatory system, accounting and tax provisions, economic performance, financial markets development, investor protection, geographical, political and cultural factors distinctly affect cross-border acquisition's completion. Lastly, we outline contemporary issues in M&A research, and suggest promising areas for future exploration. JEL Classification: G34

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Macroeconomic Change, and Cross-Border Mergers and Acquisitions: The Indian Experience, 1991-2010

Abstract: The purpose of this paper is to analyze the market for cross-border mergers and acquisitions (CB-M&A) representing the Asian emerging market-India for the period 1991 through 2010.

Cited by 6 publications

References 117 publications

Capital Structure of Brazil, Russia, India and China by Economic Crisis

Capital Structure of Brazil, Russia, India and China by Economic Crisis

The causes and consequences of delayed/abandoned cross-border merger & acquisition transactions

Determinants of Cross-Border Mergers and Acquisitions: A Comprehensive Review and Future Direction

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