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Finance Department's Lecture

Topic:        Director Experience and Cross-Border Mergers and Acquisitions

Speaker:Shu Lin

Time:         10:00 Nov.3 2017

Place:        Room509,Mingde Main Building


We make the first attempt in the literature to explore the role of director experience in firm cross-border merger and acquisition decisions. We obtain detailed individual level information about top managers and directors for U.S. firms from the BoardEx database and merge it with corresponding firms’ cross-border merger and acquisition information obtained from the SDC database. The merged dataset allows us to identify each director's country-specific experience. Our results show that directors' country-specific experience is an important determinant of firm cross-border M&A decisions. Firms are more likely to acquire targets in countries where their directors have experience, and this effect is more pronounced for target countries that are less transparent, more physically or culturally distant from the U.S.. Finally, deal level evidence also suggests that director experience is associated with significantly higher completion rates, shorter negotiation time, and higher chances of using equity as a payment method.