Cross-border acquisition and financial leverage: the empirical evidence from acquisition in Asia

Fadhil Rahmat Novialdi, Ratna Wardhani

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


Purpose: This study aims to find empirical evidence on the effect of cross-border acquisition (CBA) on the financial leverage of the acquirer from Asia. It also examines the moderating role of the target countries (developed or developing countries) and experience of the acquirer in the foreign market on the relationship between CBA and financial leverage. Design/methodology/approach: This study uses pooled data regression using 1,073 acquisition transactions by Asian Acquirer from 2012 to 2014. Findings: The results show that before the acquisition, the leverage level of CBA firms is higher than the domestic acquisition firms and after the acquisition. CBA firms increase their leverage. This study also shows that the increasing leverage post the CBA is lower if the target comes from developed countries rather than developing countries and acquirer’s experience in international activities does not affect the impact of CBA on acquirer’s post-acquisition financial leverage. Originality/value: The study contributes to the literature by providing empirical evidence of the impact of CBA on leverage in the context of Asian countries. By contrast, most of the Asian countries are developing countries, and the institutional environment across countries in Asia is different from developed countries from other regions.

Original languageEnglish
Pages (from-to)206-228
Number of pages23
JournalMeditari Accountancy Research
Issue number1
Publication statusPublished - 20 Jan 2020


  • Asia
  • Cross border acquisition
  • Emerging market
  • Leverage


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