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

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

Authors

Catherine Cai Catherine.Cai@uwe.ac.uk
Senior Lecturer in Strategy and International Management

Kees Van Veen

Sathyajit Gubbi



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.

Journal Article Type Article
Publication Date Jan 31, 2014
Journal Academy of Management Proceedings
Print ISSN 0065-0668
Publisher Academy of Management
Peer Reviewed Peer Reviewed
Volume 1
Issue 13556
APA6 Citation Cai, Y., van Veen, K., & Gubbi, S. (2014). Does government stake influence cross-border deal completion? Evidence from Brazil. Academy of Management Proceedings, 1(13556), https://doi.org/10.5465/AMBPP.2014.154
DOI https://doi.org/10.5465/AMBPP.2014.154
Keywords government ownership, cross-border M&As, deal completion, emerging market, firm, institutional voids
Publisher URL http://dx.doi.org/10.5465/AMBPP.2014.154
Additional Information Title of Conference or Conference Proceedings : AOM 2014 Annual Conference

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