Cross Border M&A and Institutional Theory
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School of Business |
Bachelor's thesis
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Date
2021
Department
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Mcode
Degree programme
(Mikkeli) Bachelor’s Program in International Business
Language
en
Pages
25
Series
Abstract
Objectives: The main objectives of this study were to discern the impact of institutional distance on cross-border M&A performance, and to determine whether this effect changes over time. To achieve this, this study had to find suitable ways to measure both institutional distance and M&A performance, the latter of which is the topic of debate in the literature. Summary: A regression analysis was conducted on a sample of 353 cross-border M&A transactions. Return on assets was used to measure performance, the dependent variable, and a modified version of WEF’s competitiveness rankings was used to measure institutional distance. Other variables studies included, deal size, and the sectors in which the acquirors and targets operated. Conclusions: This study found that institutional distance initially causes a significant fall in performance but subsequently causes a significant surge in performance, for the acquiror. This present a new, dynamic role for institutional distance for future researchers to explore. Furthermore, this study also found a significantly positive effect of acquiror/target relatedness in the near-term, and a significantly negative effect of deal size in the near-term.Description
Thesis advisor
Stepanov, RomanKeywords
Institutional theory, Institutional distance, Cross-border M&A, M&A, Mergers and acquisitions