| Journal: | BAR - Brazilian Administration Review |
| Database: | |
| System number: | 000552900 |
| ISSN: | 1807-7692 |
| Authors: | Dakessian, Leon Chant1 Feldmann, Paulo Roberto1 |
| Institutions: | 1Universidade de São Paulo, FEA, São Paulo, SP. Brasil |
| Year: | 2013 |
| Season: | Oct-Dic |
| Volumen: | 10 |
| Number: | 4 |
| Pages: | 462-489 |
| Country: | Brasil |
| Language: | Inglés |
| English abstract | The central proposition of this paper is to assess the performance of cross-border acquisitions made by Multilatinas. Applying the event study method to a sample of 607 announcements of acquisitions during the period 1989-2011 by 182 Multilatinas from Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, we conclude that: (a) on average, these announcements have a neutral impact on the short-term returns to acquiring companies' shareholders; (b) cross-sectional analysis reveals that relative size of the deals have a negative and significant effect on investors' reactions and; (c) unlike the institutional distance between home and host countries, cultural distance matters, since it has a negative and significant effect on the perceptions that investors have regarding the expected economic impact of acquirers' cross-border merger and acquisition (M&A) decisions. Inasmuch as the market rationality assumption that underlies the event study method has been questioned, future research lines are proposed in order to search for alternative long-term performance constructs concerning M&A processes in general that can: (a) shed light on the reality of value creation (and destruction) from cross-border acquisitions made by Multilatinas; and (b) contribute to strategy, international business and M&A theories and practice. |
| Keyword: | Internationalization, Internalization theory, Event study, Multilatinas, Abnormal returns |
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