List of variables
| Variable | Description and source |
|---|---|
| Dependent variable | |
| Pubtarget | An indicator variable taking on the value of one if the target firm is publicly listed firm and zero otherwise (Source: SDC Platinum) |
| Country-level variables | |
| GovQuality | A country's quality of government. It is a combined score derived from six dimensions of governance, including (1) The rule of law, (2) regulatory quality, (3) political stability and absence of violence, (4) government effectiveness, (5) voice and accountability and (6) control of corruption. Higher values indicate greater quality of government (Source: World Bank) |
| EcoFreedom | A country's quality of economic freedom. The index measures the country's degree of economic freedom in five wide-ranging areas: (1) Size of government, (2) Legal structure and security of property rights, (3) Access to sound money, (4) Freedom to trade internationally and (5) Regulation of credit, labour and business (Source: Fraser Institute) |
| FinDevelop | This index measures the financial development of a country and constructed from the commonly used four financial development indicators in the literature: (1) Log of M2 to GDP, (2) Log of liquid liabilities to GDP (M3 to GDP), (3) Log of total domestic credit provided by the banking sector to GDP and (4) Log of domestic credit to the private sector to GDP (Source: World Bank) |
| CulDistance | This index measures cultural distance between a home and a host country. It is a combined score derived from six dimensions of Hofstede's national culture, including (1) power distance, (2) individualism versus collectivism, (3) masculinity versus femininity, (4) Uncertainty Avoidance Index, (5) Long- term versus short-term normative orientation and (6) indulgence versus restraint (Source: Hofstede's website) |
| UAI | This index reflects the amount that people prefer to be governed by rules, laws and standard operating procedures and accept uncertainty or ambiguity. Culture with a high UAI index prefer things to be well ordered, planned ahead and run to time, while a low UAI score suggests a society that is more flexible and relaxed and does not worry when things go wrong (Source: Hofstede's website) |
| GDP Growth | Annual percentage growth rate of gross domestic product (Current US$) (Source: World Development Indicators, World Bank) |
| GDP per capita | Gross domestic product per capita (Constant, 2005 US$) (Source: World Development Indicators, World Bank) |
| Deal-specific variables | |
| Relatedness | An indicator variable taking on the value of one if the target and the acquirer are in same areas of operations and zero for unrelated acquisitions (Source: SDC Platinum) |
| Cash | A dummy that is one if an acquisition is paid by cash and zero if it is by an acquirer's stock or a mixed cash and stock (Source: SDC Platinum) |
| Toehold | The percentage of target equity held by the bidder before the acquisition (Source: SDC Platinum) |
| Firm-level variables | |
| Size | Logarithm of total assets of the target in the fiscal year ended before the announcement of the deal in US$ m (Source: Worldscope, Mint Global) |
| RelSize | A ratio of the transaction value to total assets of the bidder (Source: Worldscope, Mint Global) |
| Public bidder | An indicator variable taking on the value of one if the acquirer is a publicly listed firm and zero otherwise (Source: SDC Platinum) |
| Emerging bidder | An indicator variable taking on the value of one if acquirers come from emerging market economies and zero otherwise (Source: SDC Platinum) |
| Variable | Description and source |
|---|---|
| An indicator variable taking on the value of one if the target firm is publicly listed firm and zero otherwise (Source: SDC Platinum) | |
| A country's quality of government. It is a combined score derived from six dimensions of governance, including (1) The rule of law, (2) regulatory quality, (3) political stability and absence of violence, (4) government effectiveness, (5) voice and accountability and (6) control of corruption. Higher values indicate greater quality of government (Source: World Bank) | |
| A country's quality of economic freedom. The index measures the country's degree of economic freedom in five wide-ranging areas: (1) Size of government, (2) Legal structure and security of property rights, (3) Access to sound money, (4) Freedom to trade internationally and (5) Regulation of credit, labour and business (Source: Fraser Institute) | |
| This index measures the financial development of a country and constructed from the commonly used four financial development indicators in the literature: (1) Log of M2 to GDP, (2) Log of liquid liabilities to GDP (M3 to GDP), (3) Log of total domestic credit provided by the banking sector to GDP and (4) Log of domestic credit to the private sector to GDP (Source: World Bank) | |
| This index measures cultural distance between a home and a host country. It is a combined score derived from six dimensions of Hofstede's national culture, including (1) power distance, (2) individualism versus collectivism, (3) masculinity versus femininity, (4) Uncertainty Avoidance Index, (5) Long- term versus short-term normative orientation and (6) indulgence versus restraint (Source: Hofstede's website) | |
| This index reflects the amount that people prefer to be governed by rules, laws and standard operating procedures and accept uncertainty or ambiguity. Culture with a high UAI index prefer things to be well ordered, planned ahead and run to time, while a low UAI score suggests a society that is more flexible and relaxed and does not worry when things go wrong (Source: Hofstede's website) | |
| Annual percentage growth rate of gross domestic product (Current US$) (Source: World Development Indicators, World Bank) | |
| Gross domestic product per capita (Constant, 2005 US$) (Source: World Development Indicators, World Bank) | |
| An indicator variable taking on the value of one if the target and the acquirer are in same areas of operations and zero for unrelated acquisitions (Source: SDC Platinum) | |
| A dummy that is one if an acquisition is paid by cash and zero if it is by an acquirer's stock or a mixed cash and stock (Source: SDC Platinum) | |
| The percentage of target equity held by the bidder before the acquisition (Source: SDC Platinum) | |
| Logarithm of total assets of the target in the fiscal year ended before the announcement of the deal in US$ m (Source: Worldscope, Mint Global) | |
| A ratio of the transaction value to total assets of the bidder (Source: Worldscope, Mint Global) | |
| An indicator variable taking on the value of one if the acquirer is a publicly listed firm and zero otherwise (Source: SDC Platinum) | |
| An indicator variable taking on the value of one if acquirers come from emerging market economies and zero otherwise (Source: SDC Platinum) | |
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