Portable country governance and cross-border acquisitions

Frederik Schlingemann, JA Ellis, SB Moeller, René M Stulz

Research output: Contribution to journalArticleAcademicpeer-review

55 Citations (Scopus)
28 Downloads (Pure)


The agency theory and law and finance literatures show good country governance encourages financial development, mitigates agency problems, and increases firm value. Drawing on these literatures, we develop a theory that benefits from good country governance are portable by firms across countries through cross-border acquisitions. Using acquisitions from 56 countries from 1990 to 2007, we find that acquirers can transport the benefits from good country governance, so that they gain more from acquiring targets with worse country governance than their own. As predicted, the acquirer’s stock-price reaction to acquisitions increases with the country governance distance between the acquirer and the target.
Original languageEnglish
Pages (from-to)148-173
Number of pages26
JournalJournal of International Business Studies
Issue number2
Publication statusPublished - 2017

Research programs

  • RSM F&A


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