Regional equity market conditions and cross-border mergers and acquisitions (M&A)
Why this work is in the frame
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Bibliographic record
Abstract
Purpose – Do regional equity market conditions (bear market) affect the financial performance of firms involved in cross-border mergers and acquisitions (M & A)? If so, is there a clear difference between inward and outward M & A in selected regions? The author addresses these questions using a sample of cross-border M & A between 1990 and 2013 in three major geographical regions of the emerging markets: Brazil, Russia, India, and China (BRIC), Eastern Europe, and Africa. The author finds that regional equity market conditions – such as bear equity conditions – along with direction of the cross-border M & A (inward vs outward), and differences in economic fundamentals among these regions carry valuable information and have real effects on market reactions to the announcement of cross-border M & A transactions. The paper aims to discuss these issues. Design/methodology/approach – Using an empirical approach, the author takes a regional perspective, with emphasis on three regions (BRIC, Eastern Europe, and Africa), and aim to determine the impact of the state of the regional equity market (bear stock market), and direction and duration of the M & A on market reactions to the announcement of cross-border M & A. Findings – The author documents the impact of regional equity market conditions on the financial performance of firms involved in cross-border M & A. The author underlines that differences in economic fundamentals among regions carry valuable information and have real effects on the performance of target firms. Practical implications – On the one hand, merger arbitrage investors are keen to learn how to profit and position their investments accordingly during those periods. Therefore, this study has also put the limelight on the underlying factors that influence the market reaction around the M & A announcement at the regional level and clearly shows the additional benefits of regional market conditions, direction of the transactions, and the timing to highlight the positive gain of those equity investments regarding the emerging markets. On the other hand, as the purpose of the study is to delve into the market reactions to the M & A announcement while taking into consideration some relevant factors such as regional equity market conditions to assist companies’ managers and CEOs to effectively choose the right time. Social implications – By incorporating the result presented in this study, another “family” of mutual funds, beyond just the combination of risky assets and the riskless asset is being introduced. Those investment portfolios which take into account merger and/or any opportunistic strategies are tailored more to the needs of various clienteles. For assisting the analyst and portfolio manager, the intuitive character of the result makes it versatile and easy to use by investment firms as an additional decision tool. Originality/value – To the author knowledge, this is the first study that delves into the market performance of companies involved in cross-border M & A in the emerging markets by taking a regional perspective and aiming to determine the impact of the state of the regional equity market (bear stock market) on the M & A. It offers additional support to those institutional investors who are pursuing international diversification across various countries including emerging markets such that bear equity conditions (recessions in the regional stock markets) have an additional negative impact and a real effect on the performance of target firms.
Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.002 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.001 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it