International corporate governance spillovers: Evidence from cross-border mergers and acquisitions

Rui Albuquerque, Luis Brandao-Marques, Miguel A. Ferreira, Pedro Matos

Research output: Contribution to journalArticlepeer-review

33 Citations (Scopus)
56 Downloads (Pure)


We test the hypothesis that foreign direct investment promotes corporate governance spillovers in the host country. Using firm-level data from 64 countries during the period 2005-2014, we find that cross-border M&A activity is associated with subsequent improvements in the governance of nontarget firms when the acquirer country has stronger investor protection than the target country. The effect is more pronounced when the target industry is more competitive. Cross-border M&As are also associated with increases in investment and valuation of nontarget firms. Alternative explanations, such as access to global financial markets and cultural similarities, do not appear to explain our findings.
Original languageEnglish
Pages (from-to)738-770
JournalReview Of Financial Studies
Issue number2
Publication statusPublished - Feb 2019


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