Abstract
AbstractThis paper explores whether social ties, proxied by Facebook friendship links, can explain why the number and value of mergers and acquisitions (M&As) are greater within countries than between countries. We find that social ties are positively correlated with the number and value of M&As. We also demonstrate that the home bias in M&As is greatly reduced once we control for the differences in social ties between and within countries. We further find that social ties particularly facilitate M&As when the level of corruption is high, press freedom is limited in the target country, and there are more cultural differences between the acquirer and target countries.
Funder
Ministerio de Ciencia, Innovación y Universidades
Basque Government Department of Education, Language Policy and Culture
Junta de Andalucia
Generalitat Valenciana
Ministerio de Ciencia e Innovación
Universidad de Granada
Publisher
Springer Science and Business Media LLC
Subject
General Economics, Econometrics and Finance