The value of foreign ownership

Abstract

We use firm level data on cross-border mergers and acquisitions and share prices to explore the extent to which foreign ownership increases the profitability of firms in emerging markets. We find that cross-border acquisitions add value to target firms. However, there is only weak evidence that such acquisitions add more value than purely domestic acquisitions. Further, most of this latter effect occurs when the target firm's country is in a crisis. [PUBLICATION ABSTRACT]