Foreign acquisition and credit risk: Evidence from the U.S. CDS market
| Title | Foreign acquisition and credit risk: Evidence from the U.S. CDS market |
|---|---|
| Author | Yılmaz, Ümit |
| Publication Date: | 2023-06-17 |
| Publication Place | - Cambridge University Press |
| Type | Periodical |
| Language | English |
| Digital | Yes |
| Manuscript | No |
| Library: | Özyeğin University |
| Library Asset ID | 0022-1090 |
| Record ID | 986bc33e-5dce-49b3-a91e-bb11c7be370a |
| Library Location | International Finance |
| Date | 2023-06-17 |
| Sample Text | This article empirically analyzes the effect of foreign block acquisitions on U.S. target firms' credit risk as measured by their credit default swap (CDS) spreads. Foreign block purchases lead to a greater increase in the target firms' CDS premia post-acquisition compared to domestic block purchases. This effect is stronger when foreign owners are geographically and culturally more distant, and when they obtain majority control. The findings are consistent with an asymmetric information hypothesis, in which foreign owners are less effective monitors due to information barriers. |
| DOI | 10.1017/S0022109022000035 |
| Cilt | 58 |
