The impact of cross-border M&A on stock returns

This paper studied the impact of cross-border M&A on stock returns on announcement date. The prior research shows controversial arguments on whether cultural factors influence the stock returns. To study the topic, 157 samples of cross-border M&A deals acquired by U.S. firms are collected and t-test and OLS analyses are conducted from 2004 to 2014. First, the research proves that the cross-border M&A makes significant difference on stock returns on announcement date. Second, it researched whether particular cultural aspect: trust, independence, and creativity can explain the difference. The empirical findings in this research indicate that those cultural characteristics do not have significant explanatory power so the cultural distance should not be considered significantly in the acquisition process.