Cross-border acquisitions: the UK experience

This paper tests a composite empirical model of cross-border acquisitions i nvolving UK firms between 1987-1995 using panel data analysis. The empirica l model includes capital market variables and regulatory variables derived from the existing literature. The results show that models that explain cro ss-border acquisitions through capital market imperfections are not signifi cant. Cross-border activity has a strong relationship with the level of the UK stock market suggesting that cross-border acquisitions are, in some par t, an extension of domestic activity. Corporate tax differentials also have significant impact on activity.