Do Asian Companies Bid Higher in Cross-Border M&A? A Moderating Effect Analysis

Abstract

This study examines whether Asian companies pay higher premiums in cross-border mergers and acquisitions (M&A) and identifies the institutional factors driving this behavior. Grounded in the concept of Asian institutional logic—characterized by state coordination, relational governance, and long-term strategic orientation—we argue that these features shape distinctive acquisition patterns compared to Western market logics. Using a large sample of cross-border M&A during the period 2003–2021, we first uniquely compare whether the geographical origin of the acquirer firm is a relevant determinant of the premium paid, namely for cross-border operations targeting Asia, Europe, and the United States. We find that Asian acquirers pay significantly higher premiums compared to their European and U.S. counterparts. Employing a moderating effect approach, we find that this relationship is amplified by four mechanisms aligned with the Asian institutional logic. Specifically, we analyze the role of Chinese state-owned enterprises (SOEs) and find that they contribute significantly to the higher premiums paid. Our results are robust across different model specifications and subsample analyses, shedding light on the distinct dynamics of cross-border M&A involving Asian firms.