Merger waves, entry-timing, and cross-border acquisition completion: A frictional lens perspective

Fuad, Mohammad; Gaur, Ajai

doi:10.1016/j.jwb.2018.12.001

Cited by 67 publications

(67 citation statements)

References 73 publications

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“…In the past, scholars have investigated acquisition failures by mostly focusing on the post-acquisition integration phase (Graebner, Heimeriks, Huy, & Vaara, 2017). In recent times, however, scholars have devoted more effort to find out why many announced acquisitions get abandoned (Fuad & Gaur, 2019;Li et al, 2019). In order to explain the phenomenon of deal completion/abandonment along the acquisition timeline, I summarize the acquisition process below.…”

Section: Acquisition Outcomementioning

confidence: 99%

“…Third, I controlled for acquirer's prior ownership in the target (toehold), operationalized as the percentage of acquirer's ownership in the target prior to the focal transaction (Hukkanen & Keloharju, 2019). Fourth, I controlled for the size of acquirer, operationalized as the natural logarithm of the firm's sales 1 year prior to the acquisition (Fuad & Gaur, 2019). Fifth, I controlled for target size estimated as the transaction value divided by proportion of equity sought in the focal transaction (Ahammad et al, 2017).…”

Section: Measurement Of Variablesmentioning

confidence: 99%

“…Sixth, I included a dummy variable of public target, which received a value of 1 for publicly listed targets and 0 otherwise (Li et al, 2019). Seventh, at the deal level, I controlled for the percentage sought by the acquirer in the focal transaction (Fuad & Gaur, 2019). Eighth, I included a dummy variable of cash payment to control for its influence on the dependent variable (Fuad & Gaur, 2019).…”

Section: Measurement Of Variablesmentioning

confidence: 99%

“…Definitions and references of the variables are presented in Table 1. Public target A dummy variable that took the value of 1 for publicly listed targets and 0 otherwise (Li et al, 2019) Percent sought The percentage sought by the acquirer in the focal transaction (Fuad & Gaur, 2019) Cash payment A dummy variable that took the value of 1 if the mode of payment was cash and 0 otherwise (Fuad & Gaur, 2019) Horizontal relatedness A dummy variable that took the value of 1 if the acquirer and target belonged to the same third-level industry classification as per BISC and 0 otherwise (Ahmed & Bebenroth, 2019) Host country formal institutional development (variable identifier: host institutions)…”

Section: Measurement Of Variablesmentioning

confidence: 99%

“…In the mergers and acquisitions literature, the focus of numerous recent studies is on factors that influence deal outcomes in terms of whether the deal gets completed or abandoned (Fuad & Gaur, 2019;He & Zhang, 2018;Kim & Song, 2017;Li, Li, & Wang, 2019;Li, Xia, & Lin, 2017;Lim & Lee, 2017;Popli, Akbar, Kumar, & Gaur, 2016).…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Board size and acquisition outcome: The moderating role of home country formal institutional development

Waqar

2020

Manage Decis Econ

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The effect of acquirer's board size on the outcome of an acquisition (i.e., whether an announced deal gets abandoned or completed) was examined on the basis of a sample of 775 cross-border acquisitions. The study took into consideration the moderating effect of formal institutional development of the home country. Results showed that board size was negatively associated with the likelihood of deal abandonment and that this relationship was weaker for home countries where formal institutional development was high. The study contributes to the literature on group decision-making theory, institutional view of corporate governance, and acquisition outcome.

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Section: Acquisition Outcomementioning

confidence: 99%

Section: Measurement Of Variablesmentioning

confidence: 99%

Section: Measurement Of Variablesmentioning

confidence: 99%

Section: Measurement Of Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Board size and acquisition outcome: The moderating role of home country formal institutional development

Waqar

2020

Manage Decis Econ

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Institutional support, hazards, and internationalization of emerging market firms

Nuruzzaman

Singh

Gaur

2019

Global Strategy Journal

116

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Research SummaryWe utilize the institution‐based view to study the effect of home institutions on the internationalization of emerging economy firms. We argue that institutional support and institutional hazards co‐exist and can influence firm internationalization simultaneously. However, institutional support has a stronger effect on internationalization than institutional hazards. Further, we argue that when the institutional environment is supportive of the internationalization effort, state ownership provides proximity to institutional resources and thus amplifies the relationship between institutional support and firm internationalization. However, when the institutional environment is perilous to business activities, state ownership increases dependency on the institutional environment and constrains the escape from the domestic market. Results based on the World Bank Enterprises Survey of 9,337 manufacturing firms from 81 emerging economies largely support our arguments.Managerial SummaryHome country institutions have different components, some of which can support while others can hinder the internationalization of emerging economy firms. Our study helps managers to identify different types of home‐based institutional supports that can help international expansion and home‐based institutional hazards that firms can avoid by diversifying their sales geographically. The findings suggest that leveraging institutional support at home country has a stronger effect on internationalization than escaping institutional hazards because institutional supports can complement other home‐based advantages that emerging economy firms have. Furthermore, state ownership can increase a firm's proximity to institutional resources, providing firms greater access to institutional support for international expansion.

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Deal completion in cross border acquisitions waves: The role of deal timing and pace

Fuad

Gaur

Pattnaik

2023

Global Strategy Journal

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Research SummaryCross‐border acquisitions (CBAs) exhibit a wave‐like pattern, clustering temporally, industry‐wise, and at the country level. We draw upon the bargaining power perspective and argue that CBA wave context alters the relative bargaining position between acquirer and target firms, which affects deal completion. Our findings suggest that acquisition wave deals have a lower likelihood of completion compared to non‐wave deals. However, within a CBA wave, we find that acquirers that move early and with a high acquisition pace have a higher likelihood of deal completion. We test our arguments on a simulation‐based dataset comprising 17,815 wave and non‐wave deals identified between 1990 and 2012 across 13 acquirer and 21 target countries. We contribute to the CBA literature by differentiating between wave and non‐wave environments and their impact on deal completion.Managerial SummaryCross‐border acquisitions (CBAs) often happen in waves that emerge at the industry and country‐levels. These waves are characterized by heightened level of acquisition activities such that the relative position of acquirer and target firms is different within waves as compared to outside of the waves. As a result, acquisition deals announced within waves are less likely to be completed than those announced outside of the waves. At the same time, acquiring firms that announce acquisitions at an early stage within a CBA wave and move with a faster speed to conduct more acquisitions are more likely to successfully close the deals than other firms.

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Merger waves, entry-timing, and cross-border acquisition completion: A frictional lens perspective

Cited by 67 publications

References 73 publications

Board size and acquisition outcome: The moderating role of home country formal institutional development

Board size and acquisition outcome: The moderating role of home country formal institutional development

Institutional support, hazards, and internationalization of emerging market firms

Deal completion in cross border acquisitions waves: The role of deal timing and pace

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