earticle

영어

We empirically prove that the negative listing effect is more pronounced in countries with high level of GDP growth rate uncertainty than countries without such uncertainty. We analyze the listing effect by examining a sample of 180 non-financial firms that disclosed cross-border M&As between 2004 and 2013 in the Korea Exchange (KRX) stock market and 41 countries where the target firms are located. Target firms that are listed in their base countries are directly exposed to the capital market through the stock exchange, so when uncertainty is strongly related to the GDP (PPP) growth rates of the target country, it has a greater impact on listed firms than on non-listed firms, thereby reducing the shareholder wealth of acquiring firms. Further, our results show that the listing effect caused by economic growth uncertainty in the target country is stronger for cross-border M&As during the global financial crisis or when the target firms are based in developing countries. This study is the first to empirically prove that the listing effect is attributable to the uncertainty in the GDP (PPP) growth rates of the target country and presents new implications for future research on the disclosure effect of cross-border M&As.