Does government stake influence cross-border deal completion? Evidence from Brazil

Cai, Yingdan; Van Veen, Kees; Gubbi, Sathyajit

Abstract

In the context of developing economies, government as an important stakeholder plays a proactive role in strategic investment decisions made by firms. In this paper we investigate whether the equity stake held by government in the acquiring and the target firm influence likelihood of deal completion. Our analysis of over 500 cross-border deals by Brazilian multinational firms suggests that government equity ownership has a material impact on deal completion. While government equity stake in the acquirer enhances likelihood of deal completion, government equity ownership in the target firm diminishes the possibility. Moreover, the effects of government equity ownership differ for public traded and private traded firms.

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: 74th Annual Meeting of the Academy of Management, AOM 2014
• Acceptance Date: Apr 1, 2014
• Publication Date: Jan 1, 2014
• Deposit Date: Mar 16, 2017
• Publicly Available Date: Mar 16, 2017
• Journal: Academy of Management Proceedings
• Print ISSN: 0065-0668
• Electronic ISSN: 2151-6561
• Publisher: Academy of Management
• Peer Reviewed: Peer Reviewed
• Volume: 1
• Issue: 13556
• Pages: 867-872
• DOI: https://doi.org/10.5465/AMBPP.2014.154
• Keywords: government ownership, cross-border M&As, deal completion, emerging market, firm, institutional voids
• Public URL: https://uwe-repository.worktribe.com/output/821711
• Publisher URL: http://dx.doi.org/10.5465/AMBPP.2014.154
• Additional Information: Title of Conference or Conference Proceedings : AOM 2014 Annual Conference
• Contract Date: Mar 16, 2017