International Deal Experience and Cross-Border Acquisitions

I show that corporate directors' human capital facilitates international investments. Directors' prior cross-border investment experience causally increases current firms' propensities to internationalize business operations through cross-border acquisitions of foreign companies. Internationalizing firms are more likely to invest in countries where directors have prior cross-border acquisition experience. These effects are most pronounced for acquisitions of foreign firms headquartered in countries that are culturally and institutionally remote from the acquirer's home country. Such investments, announced by firms whose directors have prior cross-border acquisition experience, tend to be completed successfully and are interpreted relatively favorably by financial markets. These effects are unexplained by the involvement of investment bank advisers and are distinct from other, more general, forms of directors' business expertise