Creditor rights, claims enforcement, and bond returns in mergers and acquisitions

Luc Renneboog, Peter Szilagyi, Cara Vansteenkiste

Research output: Contribution to journalArticleScientificpeer-review

28 Citations (Scopus)
43 Downloads (Pure)


This article shows that country-level differences in creditor protection affect bond performance around cross-border M&A announcements. Using Eurobonds and a global sample of 1,100 cross-border M&As, we find that the bondholders of bidding firms respond more positively to deals that expose their firm to a jurisdiction with stronger creditor rights and more efficient claims enforcement through courts. Positive creditor protection spillovers are enhanced by now-global jurisdictional cooperation in multinational insolvencies and creditors’ ability to do insolvency arbitrage. The spillover effects we observe are stronger for firms with higher asset risk, longer maturity bonds, and a higher likelihood of financial distress.
Original languageEnglish
Pages (from-to)174-194
JournalJournal of International Business Studies
Issue number2
Publication statusPublished - Feb 2017


  • bondholder value
  • cross-border mergers and acquisitions (M&As)
  • creditor rights
  • legal enforcement
  • event study
  • Eurobonds


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