XXV Edition

1-2 December 2016"

Do Corporate Managers Herd? Evidence from Cross-Border M&A

Vasileva Kristina, University of Westminster
Faelten Anna, City, University of London
Chan Ka Kei, University of Westminster

This paper studies herd behaviour in cross-border mergers and acquisitions (M&A). Using a new herding measure introduced in this paper and global cross-border M&A deal volumes from 1986 to 2012, we aim to find out (1) whether herd behaviour exists among corporate decisions at executive level and (2) which industry sectors are the common targets in cross-border M&A herding. Also, we study how cross-border M&A herd behaviour is affected by bilateral country-level factors of acquirer country and target country. We find evidence suggesting that there is herd behaviour among corporate managers. We find this at country, regional and industry level. We find that herding behaviour is highly related to a number of economic, non-economic and geographical factors.

Area: Capital Structure and Corporate Finance

Keywords: M&A; herding; panel data; cross-border

Paper file

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