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Article: Economic impact of political barriers to cross-border acquisitions: An empirical study of CNOOC's unsuccessful takeover of Unocal

TitleEconomic impact of political barriers to cross-border acquisitions: An empirical study of CNOOC's unsuccessful takeover of Unocal
Authors
KeywordsCross-Border Acquisitions
Political Barriers
Takeover Premium
Issue Date2009
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin
Citation
Journal Of Corporate Finance, 2009, v. 15 n. 4, p. 447-468 How to Cite?
AbstractIn 2005, the US Congress challenged the acquisition by CNOOC (a Chinese state-owned enterprise) of Unocal (a US firm). This challenge creates a political barrier for foreign companies to acquire US oil companies. This paper examines the stock price reaction of US oil companies to this political opposition. Using an event study methodology, we find that this political barrier resulted in a substantial decline in the market value of US oil companies. For a period of 44 days, during which six anti-CNOOC-takeover political events occurred, the cumulative decline in the market value of a portfolio of 13 US oil refining firms was $47.5 billion and that of a portfolio of 66 US oil and gas exploration firms was $11.4 billion. This study is the first to analyze and quantify the stock price reaction of US non-merging firms to political barriers to cross-border acquisitions. It also has a policy implication regarding the recent enactment of the Foreign Investment and National Security Act of 2007. © 2009 Elsevier B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/177766
ISSN
2015 Impact Factor: 1.286
2015 SCImago Journal Rankings: 1.446
SSRN
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorWan, KMen_US
dc.contributor.authorWong, Kfen_US
dc.date.accessioned2012-12-19T09:39:50Z-
dc.date.available2012-12-19T09:39:50Z-
dc.date.issued2009en_US
dc.identifier.citationJournal Of Corporate Finance, 2009, v. 15 n. 4, p. 447-468en_US
dc.identifier.issn0929-1199en_US
dc.identifier.urihttp://hdl.handle.net/10722/177766-
dc.description.abstractIn 2005, the US Congress challenged the acquisition by CNOOC (a Chinese state-owned enterprise) of Unocal (a US firm). This challenge creates a political barrier for foreign companies to acquire US oil companies. This paper examines the stock price reaction of US oil companies to this political opposition. Using an event study methodology, we find that this political barrier resulted in a substantial decline in the market value of US oil companies. For a period of 44 days, during which six anti-CNOOC-takeover political events occurred, the cumulative decline in the market value of a portfolio of 13 US oil refining firms was $47.5 billion and that of a portfolio of 66 US oil and gas exploration firms was $11.4 billion. This study is the first to analyze and quantify the stock price reaction of US non-merging firms to political barriers to cross-border acquisitions. It also has a policy implication regarding the recent enactment of the Foreign Investment and National Security Act of 2007. © 2009 Elsevier B.V. All rights reserved.en_US
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfinen_US
dc.relation.ispartofJournal of Corporate Financeen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectCross-Border Acquisitionsen_US
dc.subjectPolitical Barriersen_US
dc.subjectTakeover Premiumen_US
dc.titleEconomic impact of political barriers to cross-border acquisitions: An empirical study of CNOOC's unsuccessful takeover of Unocalen_US
dc.typeArticleen_US
dc.identifier.emailWong, Kf: kafuwong@hkucc.hku.hken_US
dc.identifier.authorityWong, Kf=rp01111en_US
dc.description.naturepostprinten_US
dc.identifier.doi10.1016/j.jcorpfin.2009.03.004en_US
dc.identifier.scopuseid_2-s2.0-67649486884en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-67649486884&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume15en_US
dc.identifier.issue4en_US
dc.identifier.spage447en_US
dc.identifier.epage468en_US
dc.identifier.isiWOS:000268607200004-
dc.publisher.placeNetherlandsen_US
dc.identifier.ssrn1421550-
dc.identifier.scopusauthoridWan, KM=26632674500en_US
dc.identifier.scopusauthoridWong, Kf=8872594700en_US
dc.identifier.citeulike5340295-

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