Report title: Direct flights and cross-border mergers & acquisitions
Speaker: Zhang Chi (Sun Yat-sen University)
Report time: Thursday, October 27 2022, 11:00AM
Location: 201, North Block, B10, University Town Campus, SCUT
Abstract of paper：Prior evidence indicates that proximity increases investments resulting in stronger economic growth. The introduction of a non-stop direct flight between two locations in different countries allows for faster travel and a lower cost of acquiring information, potentially facilitating acquisitions abroad. We examine this channel by considering cross-border mergers and acquisitions (M&A) activity between China and the U.S. Our results suggest that direct flights matter most in target selection. Direct flights are more important for M&A activity where information asymmetry is greater and for first time acquirers in the market. We demonstrate that endogeneity is unlikely to drive the results.
