We show that it is a signal of deal quality in cross-border M&A if acquirers have private equity firms as owners (‘PE backing'). As such, announcements of cross-border M&A deals by PE-backed acquirers are associated with positive stock price reactions, but only if targets are in poor...

Contract theory largely abstracts from individual differences in the ability to design contracts. We argue that the relative expertise of contracting parties strongly affects contractual outcomes. Using unique data on company acquisition contracts, we document that lawyers with higher expertise...