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Stability of executive teams, corporate financialization, and cross-border mergers and acquisitions

Year: 2025

Type: article

Abstract: In the backdrop of accelerating global economic integration, cross-border mergers and acquisitions (M&A) have emerged as a crucial strategy for firms to penetrate international markets and secure strategic assets. Utilizing microdata from Chinese listed companies spanning from 2008 to 2022, this study delves into the underlying mechanisms through which executive team stability and corporate financialization influence cross-border M&A outcomes. The findings indicate that executive team stability exerts a notably positive influence on cross-border M&A: a more stable executive team correlates with a higher success rate and shorter completion time for these transactions. This positive effect demonstrates considerable variation across different industry sectors. Conversely, corporate financialization is found to negatively impact the success rate of cross-border M&A, although its influence on the completion time is insignificant. Moreover, the study unveils that corporate financialization acts as a negative moderator in the relationship between executive team stability and the success rate of cross-border M&A, with this moderating effect exhibiting significant disparities between strategic resource-based industries and non-strategic resource-based industries.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2025.104124

Authors: Cen Cai, Limiao He, Jialian Wen

Institutions: Shanghai University of International Business and Economics, Renmin University of China, University College London

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,930