Gains to bidder firms revisited: Domestic and foreign acquisitions in Canada

We present large sample evidence on the performance of domestic and U.S. (f oreign) bidder firms acquiring Canadian targets. Domestic bidders earn sign ificantly positive average announcement period abnormal returns, while U.S. bidder returns are indistinguishable from zero. Measures of pre- and post- acquisition abnormal accounting performance are also consistent with a supe rior domestic bidder performance. Domestic bidder announcement returns are, on average, greatest for offers involving stock payment and for the bidder s with the smallest equity size relative to the target. Neither direct fore ign investment controls, horizontal product market relationships, nor acqui sition propensities explain why domestic bidders outperform their U.S. comp etitors.