THE INTERNATIONAL MARKET FOR CORPORATE-CONTROL - MERGERS AND ACQUISITIONS OF UNITED-STATES FIRMS BY JAPANESE FIRMS

Japanese mergers and acquisitions in the U.S. create statistically sig nificant wealth gains for both Japanese bidders and U.S. targets. Cons istent with the literature on foreign direct investment and the market for corporate control, bidder-specific characteristics and exchange-r ate movements are useful in explaining the cross-sectional variation i n bidder returns: returns to Japanese bidders and to the portfolio of Japanese bidders and U.S. targets increase with the bidder's leverage, the bidder's ties to financial institutions through borrowings, and t he depreciation of the dollar in relation to the Japanese yen.