WEALTH EFFECT FOR U.S. ACQUIRERS FROM FOREIGN DIRECT INVESTMENTS

HALIL KIYMAZ


Abstract

This study investigates the wealth effects of foreign direct investments on U.S. firms during the period of 1989-2000. Overall findings indicate that U.S. acquirers experience statistically significant wealth gains of 0.57 percent around the announcement of acquisitions. The wealth effects do vary with location of target firms and acquirers' industry affiliation. Acquisitions in Europe yield significant positive wealth gains while acquisitions in Asia/Pacific, North America, and Latin/Central America regions yield negative wealth gains. The highest wealth gains to U.S. acquirers occur when they acquire targets in France followed by acquisitions in the U.K. Canadian acquisitions, on the other hand, yield negative significant wealth gains. The highest wealth gains are also observed in the services industry followed by acquisitions in the manufacturing and food industries. Acquisitions in mining/ extraction, paper products, and communications sectors, on the other hand, yield statistically significant negative wealth gains to acquirers.

 

Sub Content Box

Gibson D. Lewis
Center For Business and
Economic Development
SHSU Box 2056
Huntsville TX 77341-2056
936-294-1518 Center Office
936-294-3957 Center Fax