The Effects of CEO-Board Interpersonal Networks on Cross-Border Merger Outcomes
Publication Date
1-1-2025
Document Type
Article
Publication Title
European Financial Management
DOI
10.1111/eufm.12549
Abstract
We demonstrate that interpersonal relationships between the CEO and outside directors of the firm, referred to as board friendliness, significantly influence cross-border merger outcomes. Analyzing deals across 34 countries, we find a positive investor reaction to merger announcements by firms with friendly boards. This effect is particularly strong for firms needing substantial advisory support and boards with better advising abilities. Acquirers with friendly boards are more likely to complete deals, contingent on strong institutional quality, robust regulatory standards, property rights protection, government integrity, accountability, economic and financial freedom, globalization and development status. Additionally, these acquirers experience superior postmerger financial performance.
Keywords
board functions, business environment, cross-border mergers and acquisitions, friendly boards, institutional quality
Department
Accounting and Finance
Recommended Citation
Md Nazmul Hasan Bhuyan, Luis García-Feijóo, David Javakhadze, and Tijana Rajkovic. "The Effects of CEO-Board Interpersonal Networks on Cross-Border Merger Outcomes" European Financial Management (2025). https://doi.org/10.1111/eufm.12549
