Cross‐border mergers and acquisitions amid political uncertainty: A bargaining perspective
利用国家选举作为自然实验，研究发现东道国政治不确定性增强了外国收购方的讨价还价能力，使其获得更有利的并购条件，如支付更低的收购溢价。
Research Summary : This article exploits a natural experiment to estimate the causal effect of political uncertainty on bargaining outcomes in cross‐border acquisitions. We argue that political uncertainty alters the relative bargaining power between acquiring versus target firms. The host country's political uncertainty makes the returns on cross‐border acquisitions more unpredictable. Accordingly, foreign acquirers demand compensation for such uncertainty in negotiations, otherwise they will not consider their acquisitions profitable. Thus, when political uncertainty is high in the host country, ceteris paribus, foreign acquirers have greater bargaining power, which leads to more favorable outcomes for acquirers. Using national elections to measure political uncertainty, we find evidence strongly supporting our prediction. Target firms capture a smaller portion of the acquisition gains than do acquiring firms, when political uncertainty is high. Managerial Summary : The uncertainty about the host government policies is a major concern for firms considering cross‐border acquisitions. However, we know little about how such uncertainty influences cross‐border deal negotiations and outcomes. This research investigates the effect of political uncertainty on the bargaining outcomes in cross‐border acquisitions. We argue that high political uncertainty in the host country strengthens the foreign acquirer's bargaining position relative to the acquired firm. The outcome of investment is harder to predict under political uncertainty, and therefore the foreign acquirer will require compensation for political uncertainty such as paying a lower takeover premium and using a contingent payment option. Without such compensation, the foreign acquirer may not find it attractive to make a deal. Our empirical results support our argument.