Cross-Border Mergers and Acquisitions and Financial Development: Evidence from Emerging Asia
Brooks, Douglas H.; Jongwanich, Juthathip | February 2011
Abstract
The paper examines the relationship between cross-border mergers and acquisitions (M&A) and financial development in emerging Asian economies. Bilateral data of cross-border M&A for nine emerging Asian economies during 2000–2009 are analyzed with a sample selection model and panel data model. Estimation results show that the banking sector plays a crucial role in facilitating cross-border M&A while the role of equity markets has increased in importance since, in addition to cash, the issuance of common stock and the exchange of stocks have become a popular form for payment for a deal. Because of the relatively thin market, the corporate bond market plays a limited role in supporting cross-border M&A, which is in contrast to the public bond market. The results also show that financial development in terms of stock and bond markets in the home countries tends to be more important when the target firms reside in more developed countries. In addition to financial development, the paper shows that most of the cross-border M&As are invested in the technology-related and resource-based industries while cheap labor industries are relatively less attractive.
Citation
Brooks, Douglas H.; Jongwanich, Juthathip. 2011. Cross-Border Mergers and Acquisitions and Financial Development: Evidence from Emerging Asia. © Asian Development Bank. http://hdl.handle.net/11540/2053. License: CC BY 3.0 IGO.ISSN
1655-5252
Keywords
Asian Development Bank
Development
Regional Economic Integration
Financial Sector Policies
Financial Risk Management
Bond Financing
Cofinancing
Development Financing
Economic Development and Finance
Finance
Financial Advisory Services
Financial Assistance
Financial Support
Economic integration
Development Bank
Capital Market
Regional Plans
Regional Development Bank
Development finance
ADB
Self Financing
Aid Financing
Financial Aid
Development Banks
Project Impact
Development Banks
Local government bonds
Bonds
Catastrophe bonds
Bond funds
Bond market
Multilateral development banks
Development Banks
Asset allocation
Investment management
Commercial documents
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Citable URI
http://hdl.handle.net/11540/2053Metadata
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