Family Firms' Cross-Border Mergers and Acquisitions
International Review of Financial Analysis
Original Item ID
We evaluate the link between family ownership and cross-border investment behavior. By analyzing a sample of 2000 large U.S. acquirers between 2001 and 2016, we empirically show that family firms are less active in the international market for corporate control. Unlike non-family firms, family firms generate positive cross-border acquisition returns. Our results also suggest that target country conditions and acquirer financing constraints influence the link between family ownership and cross-border acquisitiveness as well as its valuation consequences. Overall, we find evidence to indicate that reduced shareholder-manager agency conflicts in family firms result in value enhancing cross-border investment behavior.
Arena, Matteo P.; Dewally, Michaël; Jain, Bharat A.; and Shao, Yingying, "Family Firms' Cross-Border Mergers and Acquisitions" (2022). Finance Faculty Research and Publications. 146.