Institutional change and mergers and acquisitions in emerging economies
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Universidade Federal de Minas Gerais
Descrição
Tipo
Tese de doutorado
Título alternativo
Mudança institucional e fusões e aquisições em economias emergentes
Primeiro orientador
Membros da banca
Wagner Moura Lamounier
Marcos Antônio de Camargos
Alexandre Vasconcelos Aronne
Manuel Aníbal Silva Portugal Vasconcelos Ferreira
Marcos Antônio de Camargos
Alexandre Vasconcelos Aronne
Manuel Aníbal Silva Portugal Vasconcelos Ferreira
Resumo
Based on the Theory of New Institutional Economics, we have investigated how changes in pro-market institutions in emerging economies influence M&A transactions. Implicit theoretical assumptions and some previous studies that found institutional changes associated with pro-market reforms in emerging economies influence firms' strategic responses led us to propose the following thesis: in emerging economies, M&A transactions by domestic acquiring firms are positively influenced by pro-market institutional changes. The findings regarding this relationship were unfolded in three studies. The aim in the first study was to seek theoretical and empirical support for establishing a relationship between institutional change and mergers and acquisitions in emerging economies. We conducted a systematic literature review which provided evidence that changes in pro-market institutions involving reforms, deregulation, and liberalization were followed by significant effects on M&A activity. We used an AI-based document reader with a chatbot to analyze the full text of selected papers and assist in defining papers eligible for descriptive synthesis. That allowed us to propose empirical tests of such a relationship. In the second study, we conducted an analysis of how pro-market reforms in the home country affect the initiative for mergers and acquisitions by acquiring firms in emerging markets. To estimate the effects of reforms, we used binary response regression models (Logit) with a sample of 76,654 observations of firms per year, from 6,117 publicly traded firms in nine countries, covering the period from 2002 to 2021. We documented an increase in the propensity for M&A after a country implements favorable pro-market institutional reforms. The results showed that acquiring firms in emerging markets increased their probability of acquisition by 1.69% and 6.32% in response to pro-market reforms, depending on the reform indicator used. In the third paper, we used Survival Analysis to examine the effects of pro-market reforms on the duration of M&A processes in the pre-acquisition stage, undertaken by acquiring firms listed in emerging economies. We also proposed that duration and abandonment of deals are integrated aspects since, at a certain point, firms may become prone not to close the deal. Our results showed that pro-market reforms have a positive effect on the hazard function of completing an acquisition and decrease the average duration of completed deals. Furthermore, we have found a negative duration dependence, as the longer the deal remains pending, the lower the chances of completing it for each additional unit of time. To validate our hypotheses, we analyzed firm-level data on M&A transactions in 9 emerging economies over a 20-year period. Our combined studies bring important implications for both theory and practice. In general, we contribute to bridging the gap between Institutional Theory and the research stream investigating the causes of variation in M&A activity within a country. We help elucidate the long-term benefits of pro-market institutional changes in emerging economies. We offer a more detailed analysis of the duration of M&A processes and their determinants. Finally, we contribute to the literature that enhances the understanding of the effects of institutional factors on firms' individual behavior.
Abstract
Assunto
Comportamento organizacional, Empresas, Fusão e incorporação, Controladoria, Contabilidade
Palavras-chave
Takeovers, Emerging Markets, Pro-market reforms, Economic Freedom Index, Survival Analysis