Cross-Border versus Domestic Acquisitions and the Impact on Shareholder Wealth


  • Jo Danbolt,

  • Gillian Maciver

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    • The authors are both from the University of Glasgow Adam Smith Business School. Jo Danbolt gratefully acknowledges financial support from The Carnegie Trust for the Universities of Scotland. Part of this research was done while Jo Danbolt was visiting the Norwegian School of Management (BI). The authors thank Paul André (associate editor), an anonymous referee, Seraina Anagnostopoulou, Isabel Feito-Ruiz, Ian Hirst, Matthias Kiefer, Øyvind Norli, Evangelos Vagenas-Nanos, Patrick Verwijmeren and seminar participants at the Norwegian School of Management (BI), the University of Glasgow, the Multinational Finance Society Conference (Barcelona 2010) and the European Accounting Association (Rome 2011), for valuable comments and suggestions on earlier versions of this paper. Any remaining errors are the author's own.

Jo Danbolt, University of Glasgow Adam Smith Business School, University of Glasgow, West Quadrangle, Main Building, University Avenue, Glasgow G12 8QQ, UK. e-mail:


Abstract:  We analyse the impact on targets and bidders from cross-border acquisitions into and out of the UK, in comparison to companies involved in similar domestic acquisitions. We find both targets and bidders to gain more in cross-border than in comparable domestic acquisitions, with target and bidder cross-border effects of 10.1 and 1.5 percentage points, respectively. The cross-border effect is significantly higher for targets acquired by companies from countries with superior governance systems to their own. There is weak evidence to suggest bidders gain from entering new markets but for targets to gain more where the bidder already operates in the target country.