Econometrics analysis and application of event study methodology on international mergers and acquisition activities of MNCs from Eastern Europe

Abstract. The objective of this paper is to examine the impact of financial crisis on the International Expansion activities of MNCs from Eastern Europe. This study has two interrelated foci. The fist one provides an empirical analysis of international expansion activities that span around the period of 2006 – 2016. The second focus examines market reaction to the announcements of international mergers and acquisations actualized by these firms to see whether there is any value creation for firms in these activities. The paper utilizes Securities Database (SDC) Platinum Worldwide Mergers and Acquisitions database in examining 621 international mergers and acquisitions activities of various MNCs from the Czech Republic, Slovakia, Poland and Hungary. In order to assess value creation, the paper utilizes Event Study Methodology. Overall, the results suggest that Eastern European firms’ global mergers and acquisition activities increase during the beginning of financial crisis, but later the activities have slowed down. Hence, the study indicates that the effects of crisis on these firms’ activities were not immediate but began recently as their activities decreased since the beginning of 2009. Event Study results does not indicate value creation. Keywords. Firms from the Eastern Europe; International investments, Foreign direct investment; Cross-border mergers and acquisitions; Emerging market multinationals; Internationalization; Event study.JEL. F21, F23, F37, G30, G34

The Emerging Market Manufacturing Business Groups (EMBGs) and the Interplay between Innovation in Environmental Sustainability, Digitalization, Internationalization and Corporate Governance Structures: The Case of Turkish Holding Companies

Abstract. The purpose of this research is to explore the Emerging Market Manufacturing Business Groups’ (EMBG’s) innovation processes through their internationalization activities and the interplay between innovation in environmental sustainability, digitalization, networks, and corporate governance structures. This study focuses on the business dynamics of manufacturing Turkish Business Groups, namely Turkish Holding Companies. It gives a clear illustration of how manufacturing can be innovative in environmental sustainability while internationalizing and exceling its competitive advantage through utilizing both foreign and domestic resources and digitalization. The paper also demonstrates how these companies share continuous knowledge across subsidiaries and other network systems with the support of their organizational forms and/or corporate governance structures. The study comprises Turkish manufacturing multinationals that operate in the continent of Europe. It examines 15 parent firms and 200 subsidiaries that conduct manufacturing operations in countries, such as United States, Germany, Spain, Italy, Netherlands, and United Kingdom.Keywords.Emerging market manufacturing business groups, Environmental sustainability, Innovation, Digitalization, Network systems.JEL.O31, O32, O35, G34, F23, D21

Internalization strategies and value implications of Latin American emerging market multinationals

Version of RecordThis study investigates the Internationalization strategies and their value implications of Latin American Emerging Market Multinationals (LAEMMs). We examine 66 mergers and acquisitions (M&A) announcements, 20 joint venture (JV) announcements and 9 Strategic Alliance (SA) announcements associated with LAEMMs during the sample period of 1991-2005. First, the paper explores the effects of cross-border expansion patterns on firm value creation. Second, it examines market reaction to the announcements of cross-border expansion patterns. Third, it evaluates firm performance in relation to the cross-border expansion activities. This study finds that most LAEMMs do not earn significantly positive abnormal returns during the event windows defined in this study. However, it is generally evident that there is value creation in international expansion activities. According to the event-study results, value creation is mostly associated with SAs. This finding is consistent with previous research. It is also indicated that most SA announcements are received by the market positively. JVs also experience value creation during the event windows utilized in this study. However, value creation of JVs is not to the extent that of SAs. Market reaction to JV announcements is also positive, but not to the degree of SAs.Ficici, A. & Aybar, C. B. (2009). Internalization strategies and value implications of latin american emerging market multinationals. InternexT - Revista Eletrônica de Negócios Internacionais da ESPM, 4(1), 60-78

CORPORATE GOVERNANCE AND FIRM VALUE IN EMERGING MARKETS AN EMPIRICAL ANALYSIS OF ADR ISSUING EMERGING MARKET FIRMS

This study explores the value implications of good corporate governance for a sample of 54 ADR issuing emerging market firms (EMFs) from 9 countries primarily located in the regions of Asia, Eastern Europe and Latin America and the and employs recently constructed company composite corporate governance metric along with some alternative corporate governance measures associated with the origin of the issuing firm. Although the ADR literature primarily focuses on the impact of subscription to US disclosure requirements we contend that company and country specific corporate governance standards play a significant role in the risk reduction and ensuing value capture.  The fundamental inquiry in this study has the following foci: The primary focus is on the impact of corporate governance structures on firm performance as to whether adherence to standards creates market value for ADR issuing EMFs.  Do good corporate governance practices affect the value of EMFs? The secondary focus is concerned with whether the impact of corruption level and legal system in a firm’s home country affect the corporate structures of EMFs thus affecting the market value of firms.  In this study, we utilize Tobin’s q as the measure of firm performance/market value.  Our findings suggest that there is a significant correlation between corporate governance structures of ADR issuing EMFs and their market values and/or performances.  The results also indicate that the level of corruption and legal structures in home countries of EMFs strongly impact the corporate governance structures of these firms and sequentially affect their market values. Therefore, this research further contributes to the scholarly findings and suppositions that corporate structures of firms do create consequences on firm value

Evolutionary Games on Networks and Payoff Invariance Under Replicator Dynamics

The commonly used accumulated payoff scheme is not invariant with respect to shifts of payoff values when applied locally in degree-inhomogeneous population structures. We propose a suitably modified payoff scheme and we show both formally and by numerical simulation, that it leaves the replicator dynamics invariant with respect to affine transformations of the game payoff matrix. We then show empirically that, using the modified payoff scheme, an interesting amount of cooperation can be reached in three paradigmatic non-cooperative two-person games in populations that are structured according to graphs that have a marked degree inhomogeneity, similar to actual graphs found in society. The three games are the Prisoner's Dilemma, the Hawks-Doves and the Stag-Hunt. This confirms previous important observations that, under certain conditions, cooperation may emerge in such network-structured populations, even though standard replicator dynamics for mixing populations prescribes equilibria in which cooperation is totally absent in the Prisoner's Dilemma, and it is less widespread in the other two games.Comment: 20 pages, 8 figures; to appear on BioSystem

Analysing co-evolution among artificial 3D creatures

This paper is concerned with the analysis of coevolutionary dynamics among 3D artificial creatures, similar to those introduced by Sims (1). Coevolution is subject to complex dynamics which are notoriously difficult to analyse. We introduce an improved analysis method based on Master Tournament matrices [2], which we argue is both less costly to compute and more informative than the original method. Based on visible features of the resulting graphs, we can identify particular trends and incidents in the dynamics of coevolution and look for their causes. Finally, considering that coevolutionary progress is not necessarily identical to global overall progress, we extend this analysis by cross-validating individuals from different evolutionary runs, which we argue is more appropriate than single-record analysis method for evaluating the global performance of individuals

Learning and Solving Many-Player Games Through a Cluster-Based Representation

In addressing the challenge of exponential scaling with the number of agents we adopt a cluster-based representation to approximately solve asymmetric games of very many players. A cluster groups together agents with a similar “strategic view ” of the game. We learn the clustered approximation from data consisting of strategy profiles and payoffs, which may be obtained from observations of play or access to a simulator. Using our clustering we construct a reduced “twins” game in which each cluster is associated with two players of the reduced game. This allows our representation to be individuallyresponsive because we align the interests of every individual agent with the strategy of its cluster. Our approach provides agents with higher payoffs and lower regret on average than model-free methods as well as previous cluster-based methods, and requires only few observations for learning to be successful. The “twins ” approach is shown to be an important component of providing these low regret approximations.Engineering and Applied Science