TY  - GEN
AB  - We develop a model of cross-border acquisitions in which the foreign acquirer's ownership choice reflects a trade-off between easing the target's credit constraints and the costs of operating in an environment with weak institutions. Data on domestic and foreign acquisitions in emerging markets over the period 1990–2007 support the model predictions. The share of full foreign acquisitions is higher in sectors more reliant on external finance, in countries with lower financial development, and in countries with higher institutional quality. Sectoral external finance dependence accentuates the effect of country-level financial development and institutional quality. By contrast, the level of foreign ownership in partial acquisitions is insensitive to institutional factors and depends weakly on financial factors.
AU  - Alquist, Ron
AU  - Berman, Nicolas
AU  - Mukherjee, Rahul
AU  - Tesar, Linda L.
DA  - 2019
DO  - 10.17632/jt54zcm53c.1
DO  - doi
ID  - 297045
L1  - https://repository.graduateinstitute.ch/record/297045/files/1-s2.0-S002219961930011X-main.pdf
L2  - https://repository.graduateinstitute.ch/record/297045/files/1-s2.0-S002219961930011X-main.pdf
L4  - https://repository.graduateinstitute.ch/record/297045/files/1-s2.0-S002219961930011X-main.pdf
LK  - https://repository.graduateinstitute.ch/record/297045/files/1-s2.0-S002219961930011X-main.pdf
N2  - We develop a model of cross-border acquisitions in which the foreign acquirer's ownership choice reflects a trade-off between easing the target's credit constraints and the costs of operating in an environment with weak institutions. Data on domestic and foreign acquisitions in emerging markets over the period 1990–2007 support the model predictions. The share of full foreign acquisitions is higher in sectors more reliant on external finance, in countries with lower financial development, and in countries with higher institutional quality. Sectoral external finance dependence accentuates the effect of country-level financial development and institutional quality. By contrast, the level of foreign ownership in partial acquisitions is insensitive to institutional factors and depends weakly on financial factors.
PY  - 2019
T1  - Financial constraints, institutions, and foreign ownership
TI  - Financial constraints, institutions, and foreign ownership
UR  - https://repository.graduateinstitute.ch/record/297045/files/1-s2.0-S002219961930011X-main.pdf
Y1  - 2019
ER  -