The relevance of accounting standards differences for the post-acquisition performance of cross-border mergers and acquisitions

Fanyuan Zhang, Sorin Daniliuc

    Research output: Contribution to conferencePaperpeer-review

    Abstract

    This paper examines whether accounting standards differences across countries influence the post-acquisition performance of cross-border mergers and acquisitions (M&A). Extending the existing literature, this study argues that accounting standards differences between the acquirer and target negatively impact the due diligence process, while a careful and thorough due diligence process is considered as the foundation of good acquisition performance. Therefore, a negative relation between accounting standards differences and post-acquisition performance of cross-border M&As is predicted. This paper also investigates whether acquisition premium has a moderating impact on the relation between accounting standards differences across countries and post-acquisition performance of cross-border M&As. Using a sample of 426 cross-border M&As, results show that in cross-border M&As, neither the differences in accounting standards between acquirers and targets countries, nor their interaction with acquisition premiums are factors predicting the post-acquisition performance. This study contributes to the literature that looks at the post-acquisition performance of crossborder acquisitions, providing evidence that accounting standards differences do not matter in predicting the performance, probably because the acquirer does not rely just on the publicly available financial information.
    Original languageEnglish
    Pages36pp
    Publication statusPublished - 2011
    EventAccounting and Finance Association of Australia and New Zealand (AFAANZ) Conference - Darwin Australia, Australia
    Duration: 1 Jan 2015 → …

    Conference

    ConferenceAccounting and Finance Association of Australia and New Zealand (AFAANZ) Conference
    Country/TerritoryAustralia
    Period1/01/15 → …
    OtherFri Jul 01 00:00:00 AEST 2011

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