Journal of International Business Studies

, Volume 25, Issue 2, pp 343–366

Shareholder Benefits from Corporate International Diversification: Evidence from U.S. International Acquisitions

  • Constantinos C. Markides
  • Christopher D. Ittner

DOI: 10.1057/palgrave.jibs.8490204

Cite this article as:
Markides, C. & Ittner, C. J Int Bus Stud (1994) 25: 343. doi:10.1057/palgrave.jibs.8490204


Do international acquisitions—in contrast to their domestic counterparts—create value for the acquiring firms' shareholders? This study examines the valuation consequences of 276 U.S. international acquisitions made in the period 1975–1988, and provides direct evidence on the effect of international acquisitions on the market value of U.S. bidding firms. It is shown that, on average, international acquisitions create value for the acquiring firms. The study also finds that the value created is a function of the nature of the acquisition (e.g., related or unrelated); the nature of the bidding firm's industry (e.g., its concentration level and advertising intensity); the nature of the acquiring firm (e.g., its prior international experience and its current profitability); and the nature of the macroeconomic environment (e.g., tax regulations and the relative strength of the U.S. dollar).

Copyright information

© Academy of International Business 1994

Authors and Affiliations

  • Constantinos C. Markides
    • 1
  • Christopher D. Ittner
    • 2
  1. 1.London Business School
  2. 2.The Wharton School, University of Pennsylvania

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