| Article ID: | iaor2017979 |
| Volume: | 40 |
| Issue: | 1 |
| Start Page Number: | 33 |
| End Page Number: | 54 |
| Publication Date: | Mar 2017 |
| Journal: | Journal of Financial Research |
| Authors: | Crook Matthew D, Walkup Brian R, Bick Patty, Lynch Andrew A |
| Keywords: | management, decision, investment, geography & environment |
Using a sample of mergers and acquisitions from 1985 to 2014, we examine the impact of proximity between target and acquirer as a measure of information asymmetry. We find geographic distance has a significant impact on acquisitions premiums and time to completion, conditional on the size of the target firm. Small targets receive lower premiums and have a faster time to completion the closer they are to their acquirer. Conversely, large targets have a slower time to deal completion the closer their proximity. We conclude geographic distance has a substantial impact on acquisitions.