Do cross-border mergers and acquisitions increase short-term market performance? The case of Russian firms.

The purpose of this study is to test the impact of the announcement of cross-border mergers and acquisitions in the short-term market reaction of Russian acquiring firms, based on the signalling theory, institution-based view, agency theory, and synergy theory. The study is conducted using the event study method to measure the short-term stock market performance after the announcement between the period 2010 and 2019. The results of the event study show positive significant short-term market reactions for event window (-4, -3) for the IMOEX and (-4, -3) and (-1, +2) for the S&P 500, and negative short-term stock market reactions for event window (-2, +2). Detailed analysis of the explanatory variables lacks evidence to conclude that the explanatory variables that were used in this study affect the short-term stock market reaction significantly, positive or negative, after the announcement of Russian firms to execute cross-border mergers and acquisitions. The control variables show the same patterns as the explanatory variables, there lacks evidence to conclude that there exists a significant relationship between the control variables and the short-term stock market reaction after the announcement of cross-border mergers and acquisitions by Russian firms.