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Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&As

Tunyi Tunyi Abongeh, Collins G. Ntim

Journal of International Management, Volume: 22, Issue: 2, Pages: 147 - 167

Swansea University Author: Tunyi Tunyi Abongeh

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DOI (Published version): 10.1016/j.intman.2016.01.005

Abstract

This study explores firm- and country-specific antecedents of African M&As. We use one of the largest datasets to-date, consisting of 1490 unique African firms (11,183 firm-year observations) from 1996 to 2012 from 15 African countries. Our results suggest that improvements in time-varying count...

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Published in: Journal of International Management
ISSN: 1075-4253 1873-0620
Published: Elsevier BV 2016
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URI: https://cronfa.swan.ac.uk/Record/cronfa65019
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spelling v2 65019 2023-11-20 Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As eefe2792c8eed5b49feede33981dfa53 Tunyi Tunyi Abongeh Tunyi Tunyi Abongeh true false 2023-11-20 BAF This study explores firm- and country-specific antecedents of African M&As. We use one of the largest datasets to-date, consisting of 1490 unique African firms (11,183 firm-year observations) from 1996 to 2012 from 15 African countries. Our results suggest that improvements in time-varying country-level factors, including location advantages (market size, human capital and efficiency opportunities), national governance quality, and stock market development are associated with an increase in the volume of M&A activity. Consistent with the resource-curse paradox, high resource endowments are not associated with increased levels of M&A. In support of the management inefficiency, but contrary to the traditional firm size hypotheses, African targets are generally characterised by declining stock returns and accounting profitability, but are more likely to be larger firms; suggesting the presence of information asymmetry concerns in their selection. Notwithstanding, we find evidence of heterogeneity across countries with inconsistent support for the established target prediction hypotheses. Overall, our analysis suggests that a model which combines firm- and country-specific factors better explains the observed variations in African M&A activity. Journal Article Journal of International Management 22 2 147 167 Elsevier BV 1075-4253 1873-0620 National governance quality, Location advantages, Stock market development, Firm characteristics, Mergers and acquisitions, Africa 30 6 2016 2016-06-30 10.1016/j.intman.2016.01.005 http://dx.doi.org/10.1016/j.intman.2016.01.005 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University 2024-01-02T15:26:05.1394992 2023-11-20T17:33:27.1341872 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Tunyi Tunyi Abongeh 1 Collins G. Ntim 2 65019__29340__619bfb88dd96491e827c5ad3b879d54e.pdf 65019.VOR.pdf 2024-01-02T15:24:28.6884546 Output 576298 application/pdf Version of Record true © 2016 The Authors. Published by Elsevier Inc. Distributed under the terms of a Creative Commons Attribution 4.0 International License (CC BY 4.0). true eng https://creativecommons.org/licenses/by/4.0/
title Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As
spellingShingle Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As
Tunyi Tunyi Abongeh
title_short Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As
title_full Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As
title_fullStr Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As
title_full_unstemmed Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As
title_sort Location Advantages, Governance Quality, Stock Market Development and Firm Characteristics as Antecedents of African M&amp;As
author_id_str_mv eefe2792c8eed5b49feede33981dfa53
author_id_fullname_str_mv eefe2792c8eed5b49feede33981dfa53_***_Tunyi Tunyi Abongeh
author Tunyi Tunyi Abongeh
author2 Tunyi Tunyi Abongeh
Collins G. Ntim
format Journal article
container_title Journal of International Management
container_volume 22
container_issue 2
container_start_page 147
publishDate 2016
institution Swansea University
issn 1075-4253
1873-0620
doi_str_mv 10.1016/j.intman.2016.01.005
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
url http://dx.doi.org/10.1016/j.intman.2016.01.005
document_store_str 1
active_str 0
description This study explores firm- and country-specific antecedents of African M&As. We use one of the largest datasets to-date, consisting of 1490 unique African firms (11,183 firm-year observations) from 1996 to 2012 from 15 African countries. Our results suggest that improvements in time-varying country-level factors, including location advantages (market size, human capital and efficiency opportunities), national governance quality, and stock market development are associated with an increase in the volume of M&A activity. Consistent with the resource-curse paradox, high resource endowments are not associated with increased levels of M&A. In support of the management inefficiency, but contrary to the traditional firm size hypotheses, African targets are generally characterised by declining stock returns and accounting profitability, but are more likely to be larger firms; suggesting the presence of information asymmetry concerns in their selection. Notwithstanding, we find evidence of heterogeneity across countries with inconsistent support for the established target prediction hypotheses. Overall, our analysis suggests that a model which combines firm- and country-specific factors better explains the observed variations in African M&A activity.
published_date 2016-06-30T15:26:06Z
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score 11.017084

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