M&As in Africa – effects of law and governance

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dc.contributor Hanken School of Economics, Finance, Helsinki en
dc.contributor Hanken School of Economics, Finance, Helsinki en
dc.contributor Hanken School of Economics, Finance, Helsinki en
dc.contributor.author Lundqvist, Alex
dc.contributor.author Liljeblom, Eva
dc.contributor.author Löflund, Anders
dc.contributor.author Maury, Benjamin
dc.date.accessioned 2019-08-08T10:00:00Z
dc.date.available 2019-08-08T10:00:00Z
dc.date.issued 2019-07-24
dc.identifier.citation Lundqvist , A , Liljeblom , E , Löflund , A & Maury , B 2019 , ' M &As in Africa – effects of law and governance ' , International Journal of Emerging Markets , vol. 14 , no. 5 , pp. 873-898 . https://doi.org/10.1108/IJOEM-05-2018-0223 en
dc.identifier.issn 1746-8809
dc.identifier.other PURE: 10233520
dc.identifier.other PURE UUID: db921b96-862c-43fa-9003-bee1625a04e8
dc.identifier.other ORCID: /0000-0003-4924-6426/work/62600753
dc.identifier.other Scopus: 85070285621
dc.description.abstract Purpose The cultural and legal differences between foreign acquirers and African target firms can be substantial. There is also a large variation in cultures and legal systems within Africa. However, there is limited research on merger and acquisition (M&A) performance by foreign firms in Africa. The purpose of this paper is to fill this gap by exploring the “spillover by law” hypothesis (Martynova and Renneboog, 2008) that focuses on the influence of the external environment on the governance and performance of foreign M&As in Africa.   Design/methodology/approach The data set covers 415 M&A transactions by foreign firms in Africa during the period of 1999–2016. Dynamic data covering the country’s legal, cultural and political environment are collected from the World Bank, the Heritage Foundation and Transparency International.   Findings The authors find that the legal environment significantly affects the returns of bidders on African firms. For complete acquisitions, bidder returns are significantly higher when the bidder’s country has higher shareholder protection and higher creditor protection compared with the target firm’s country. The results show that the effects are significant when there is a full control change (including a change in the target firm’s nationality) but not in the case of partial control transfers. The results are consistent with the “spillover by law” hypothesis.   Originality/value The authors contribute to the literature on cross-border M&As by separately studying the valuation effects of full, majority and minority changes in control; by being the first study of the legal spillover effects in Africa; and by being the most extensive study of the legal determinants of the valuations of non-African acquirers of African firms. en
dc.format.extent 26
dc.language.iso eng
dc.relation.ispartof International Journal of Emerging Markets
dc.relation.uri https://www.emerald.com/insight/content/doi/10.1108/IJOEM-05-2018-0223/full/html
dc.rights en
dc.subject 511 Economics en
dc.subject Africa en
dc.subject Mergers and acquisitions en
dc.subject Investor protection en
dc.subject Legal environment en
dc.subject Creditor protection en
dc.subject KOTA2019 en
dc.subject PREM2019_08 en
dc.subject 2 - Hybrid open access publication channel en
dc.subject 1 - Self archived en
dc.subject https://helda.helsinki.fi/dhanken/handle/10227/254895 en
dc.subject 1- Minst en av författarna har en utländsk affiliation en
dc.subject 1- Publicerad utomlands en
dc.subject 0- Ingen affiliation med ett företag en
dc.subject AoS: Financial management, accounting, and governance en
dc.title M&As in Africa – effects of law and governance en
dc.type Article
dc.description.version Peer reviewed
dc.identifier.doi https://doi.org/10.1108/IJOEM-05-2018-0223
dc.type.uri info:eu-repo/semantics/other
dc.type.uri info:eu-repo/semantics/publishedVersion

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