Document Type


Date of Degree

Spring 2015

Degree Name

PhD (Doctor of Philosophy)

Degree In

Business Administration

First Advisor

David Mauer


This thesis consists of three chapters. The first chapter is sole-authored and is titled `Cross-border merger waves.' The second chapter is coauthored work with Professor David Mauer and Kyeong Hun Lee and is titled `Human capital relatedness and corporate mergers and acquisitions.' The third chapter is coauthored work with Professor Amrita Nain and Kyeong Hun Lee and is titled `Repetitive cross-border mergers and acquisitions.'

First chapter examines the valuation effects of cross-border merger and acquisition (M&A) waves that occurred during 1990 and 2010. I document that, like domestic mergers, cross-border mergers cluster by industry and time. Cross-border M&A waves create value overall: acquirer announcement returns as well as combined acquirer and target announcement returns within waves are positive and significantly higher than those outside of waves. Post-merger operating performance is also better for within-wave cross-border deals. In stark contrast to domestic merger waves, deals undertaken later in cross-border merger waves tend to outperform those earlier in waves within a given industry. The late entrant's outperformance is stronger if the target country is different from the acquirer country in terms of culture, financial development, and legal system. Firms' acquisition decisions in cross-border merger waves depend on the stock market reaction to recent deals undertaken by industry peers in the same country. Overall, my results suggest that cross-border acquisitions promote efficient redeployment of corporate assets. Further, information asymmetry stemming from differences between acquirer and target countries plays an important role in the timing and performance of reallocation of corporate assets across national borders.

Second chapter studies the effects of human capital relatedness on the likelihood of a merger pairing and on the valuation consequences of deals. Using comprehensive and unique occupation data, we propose a novel measure to quantify the relatedness of firms' human capital. We find that a firm is more likely to acquire a target with related human capital. Mergers between firms closely related in terms of human capital achieve greater synergies. The results are robust to other pairwise relatedness measures that may affect merger likelihood and synergy, such as product market synergies. Overall, the evidence suggests that human capital relatedness is an important factor in mergers and acquisitions.

Third chapter examines repetitive deals in the same target country. We find that as acquirers repeat cross-border deals in the same country, (i) the time between successive deals declines, (ii) the percentage of ownership stake acquired increases, and (iii) the percentage of consideration paid in cash increases. To further distinguish whether such patterns are consistent with learning or hubris, we examine repetitive cross-border deals at two different stages of learning: experience-building versus memory-loss periods (as in Hayward (2002)). We find that as the acquirer makes more deals in the country, the time between deals decreases and the abnormal announcement return increases in experience-building periods, whereas such patterns do not exist or are reversed in memory-loss periods. Our results suggest that firms gain by learning as they repeat acquisitions in the same country.

Public Abstract

My dissertation examines the valuation effects of merger and acquisition activities. In the first chapter, I investigate the development, nature, and performance of cross-border merger waves and how firms time their cross-border merger decisions during a merger wave. In the second chapter, I examine the effects of important human capital on corporate diversification strategies and valuation consequences. In the third chapter, I look at how learning takes place in cross-border mergers and whether learning from firms’ own past experience leads to better cross-border investment outcomes.

My dissertation suggests that cross-border mergers are a value-creating strategy. Firms overcome risks and difficulties surrounding cross-border mergers and acquisitions by learning from their own and their peers' deal experience. Human capital is an important consideration for corporate mergers and acquisitions. Mergers and acquisitions create more value when merging firms have related human capital.

Overall, my research advances our understanding of how firms make merger deals and their consequences, in both domestic and international markets.




xii, 142 pages


Includes bibliographical references (pages 137-142).


Copyright 2015 Qianying Xu