Aleksanyan, M., Hao, Z., Vagenas-Nanos, E. and Verwijmeren, P. (2021). Do state visits affect cross-border mergers and acquisitions Journal of Corporate Finance, 66.
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Affiliated author
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Publication year2021
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JournalJournal of Corporate Finance
This paper studies the relation between state visits and cross-border merger and acquisition (M\&A) activity. Based on 1161 state visits and 11,531 cross-border acquisitions, we find that corporations from visiting countries are more likely to acquire corporations in countries hosting the visit. Domestic acquisitions in the host country or M\&As with non-visiting countries are not elevated. Evidence from instrumental variable analysis points towards a causal effect of state visits on M\&A activity. Further analysis shows that the elevated M\&A activity originating from visiting countries can be attributed to business networking and a reduction in investment uncertainty and cultural barriers.