- Journal of Business Economics and Finance
- Vol: 8 Issue: 1
- SPEED OF ADJUSTMENT TOWARD CAPITAL STRUCTURE IN CROSS BORDER AND CROSS INDUSTRY MERGERS AND ACQUISIT...
SPEED OF ADJUSTMENT TOWARD CAPITAL STRUCTURE IN CROSS BORDER AND CROSS INDUSTRY MERGERS AND ACQUISITIONS
Authors : Irfan U. Shah, M. Banu Durukan
Pages : 38-52
Doi:10.17261/Pressacademia.2019.1014
View : 5 | Download : 2
Publication Date : 2019-03-30
Article Type : Research
Abstract :Purpose - In this study, the speed of adjustment (SOA) toward target capital structure is investigated in cross border and cross industry mergers and acquisitions (M&A). Methodology - As a measure of capital structure both book leverage (BLEV) and market leverage (MLEV) ratios are used in the analysis. The sample consists of 6,520 M&A deals for the period of 2000-2016. Findings - The findings show that for both the BLEV and MLEV, the cross border M&A deals move faster toward the target capital structure compared to non-cross border M&A deals. While the SOA rate for the same and cross industry M&A cases does not show too much difference for BLEV and MLEV. Conclusion - Overall the firms adjust to their target capital structure in maximum three years following the M&AKeywords : Speed of adjustment, cross border M&A, cross industry M&A, target capital structure, merger and acquisition