Abstract
This study investigates whether and when differences in the financial and fiscal regulatory systems between the countries of acquirers and targets that engage in cross-border M&As influence rivals' corporate responses. Drawing on the institutional arbitrage and competitive dynamics logics, we argue that cross-border M&As that provide opportunities for financial institutional gains for the targets and fiscal institutional gains for the acquirers pose a threat to the rivals and hence provoke an increase in the number of rivals' corporate responses. Additionally, we argue that the effect of cross-border M&As providing financial and fiscal institutional arbitrage opportunities on the number of rivals' corporate responses gets stronger with rivals' awareness, motivation, and capability to respond. An analysis of a unique dataset of rivals’ corporate activities before and after large horizontal cross-border M&As of their competitors in the manufacturing industry between 1999 and 2014 provides support for our main theoretical arguments and provides some contingent considerations.
Original language | English |
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Article number | 102324 |
Journal | Long Range Planning |
Volume | 56 |
Issue number | 3 |
Early online date | 19 Apr 2023 |
DOIs | |
Publication status | Published - 1 Jun 2023 |
Keywords
- Corporate response
- Cross-border M&As
- Institutional arbitrage