Wealth Gains from M&A Activity: What Role Does Geopolitics Play, According to the ICRG?

What is the impact of country risk ratings on the wealth gains (i.e., increase in the financial value or net worth experienced by the shareholders) to large U.S. bidders involved in cross-border acquisitions?

It seems the ICRG data is expositive.

In this interesting piece published in the Global Finance Journal, the authors found that American bidders experienced positive wealth gains during the merger announcements, though this was concentrated in transactions involving European targets. There were also differences in wealth gains to bidders with respect to industry classification and location of foreign targets.

Country risk factors, including economic, political, and financial risk ratings all played a significant role in explaining the wealth gains to bidders.

Furthermore, the wealth gains were higher for the firms with acquisitions in developed countries and are significantly related to GNP growth rate.

Have a look if time permits: (https://www.sciencedirect.com/science/article/abs/pii/S104402830900060X)

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