Table 1: Descriptive statistics of economic freedom score

CBMA (EM)
Sample Size: 161

CBMA( ADTE)
Sample Size: 111

CBMA( AETD)
Sample Size: 39

Diference in economic freedom score

Mean:3.96
Median : 6.8
SD :1.31
Max:37.90
Min:-37.90
Range:75.8

Mean:11.88
Median : 13.6
SD: 1.07
Max:37.90
Min:-12.10
Range:50

Mean :-18.28
Median : -16.1
SD : 1.462
Max :-0.3
Min:-37.9
Range:37.6

Acquirer country economic freedom score

Mean: 68.76
Median : 68.9
SD : 0.74
Max:90
Min:52
Range:42

Mean:72.38
Median :73.3
SD: 0.76
Max:90
Min:57.4
Range :32.6

Mean :60.02
Median : 61.7
SD: 0.96
Max :77.7
Min:52
Range:25.7

Target country economic freedom score

Mean: 64.9
Median : 63.3
SD: 0.80
Max :91.7
Min:49
Range: 42.7

Mean : 60.48
Median: 61.1
SD :7.23
Max: 91.7
Min:49
Range: 42.7

Mean: 78.34
Median: 0.910
SD: 5.75
Max :89.9
Min :64.6
Range :25.3

Table 2: Correlation matrix - CBMA (EM) - Sample size: 161

EF _Dif

Acq_EF_scor
e

Tar_Ef_scor
e

Post acq

24

Pre acq

Target
ratio

Related
Industry

Cash
deal

Deal value

Per owned

Tender
ofer

EF dif

Acq_Ef_Score

Tar_Ef_Score

.376**

.144

.035

-.065

.097

-.251**

-.154

.034

.290**

.112

.146

-.111

-.050

-.259**

-.085

.085

-.359**

-.137

.078

.005

.176

.178*

.023

-.210*
*

Table 3: Correlation matrix - CBMA (ADTE) - Sample size: 111

EF _Dif
EF dif

Acq_EF_scor
e

Tar_Ef_sco
re

Acq_Ef_Score

Tar_Ef_Score

Post acq

Pre acq

Target
ratio

Related
Industry

Cash
deal

Deal
value

Per owned

Tender ofer

.141

.139

.007

.022

.037

-.223*

-.053

.177

.046

.083

.166

-.016

-.152

-.229*

.062

.014

-.181

-.133

.190*

-.055

.096

.163

-.058

-.247*
*

Table 4: Correlation matrix - CBMA (AETD) - Sample size: 39

EF _Dif
EF dif
Acq_Ef_Score
Tar_Ef_Score

Acq_EF_scor
e

Tar_Ef_scor
e

1
1
1

Post acq

Pre acq

Target
ratio

Related
Industry

Cash
deal

Deal value

Per owned

Tender
ofer

.269

.174

-.193

.336*

-.092

-.096

.314

.181

.209

.155

-.170

.074

-.142

-.256

.010

.055

-.209

-.116

.131

-.435**

.006

-.093

-.462

-.220

*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).

Table 5: Impact of economic freedom on acquisition performance for full sample

25

This Table shows analysis using static random effects model for full sample. Values are coefficients and standard error in parenthesis, Dependent variable:
Industry-adjusted post-acquisition operating performance. *** Significant at 1%, ** Significant at 5%, * Significant at 10%.
Variable name

CBMA-EM
t- value

Constant
Sample size
Economic
difference

freedom

Acq.
Economic
score

freedom

Tar.
Economic
score

freedom

Beta
t-value
Beta
t-value
Beta
t-value

5.033*
**
161
.376

2.939***
161

ADTE
5.769***
161

5.123*
**

4.114*
**
111
.141

AETD
.366
111

2.758
**
111

.046
.476
-.359
-4.858***

Year effect
Country effect
R
R2
Adjusted R2
Wald chi2
sigma _
sigma_ e
rho

26

39
.234

1.063
39

1.20
0
39

1.46
3

1.489
.290
3.816***

.741

.153
.943
-.181
1.921
*

-.209
1.29
8

Table 6: Impact of economic freedom scores on post acquisition performance with deal characteristics and pre-acquisition performance as
control variables
This Table shows analysis using static random effects model for full sample. Values are coefficients and standard error in parenthesis, Dependent variable: Industry-adjusted
post-acquisition operating performance. *** Significant at 1%, ** Significant at 5%, * Significant at 10%.
Variable name
Constant
Sample size
Pre acquisition performance
Economic freedom difference
Acq. Economic freedom score
Tar. Economic freedom score

CBMA-EM

ADTE

AETD

t- value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

DEAL CHARACTERSTICS
27

Mode of payment - Cash

% Owned after transactions
Deal size/Transaction Value
Related merger
Mode of acquisition Tender ofer
Target ratio

Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

Year effect
Country effect
R
R2
Adjusted R2
Wald chi2
sigma _
sigma_ e
rho

Table7: Impact of difference of {property rights, freedom from corruption, fiscal freedom, Gov.spending, business freedom, labour freedom,
monetary freedom, trade freedom, investment freedom, financial freedom}on post acquisition performance with deal characteristics and preacquisition performance as control variables involving emerging markets
This Table shows analysis using static random effects model for full sample. Values are coefficients and standard error in parenthesis, Dependent variable: Industry-adjusted
post-acquisition operating performance. *** Significant at 1%, ** Significant at 5%, * Significant at 10%.
Variable name
Constant
Sample size
Pre acquisition performance

Property rights score difference

t- value
Beta
t-value
Beta
t-value

M1

M2

M3

M4

M5

M6

M7

M8

M9

M10

M11

-1.619
161
.320
4.675***

-2.015**
161
.371
5.569***

-1.399
161
.320
4.587***

-1.371
161
.336
4.847***

-1.982**
161
.331
4.879***

-2.431**
69
.248
2.292**

-1.264
161
.322
4.448***

-1.763**
161
.307
4.331***

-1.356
161
.293
4.183***

-1.550
161
.283
4.070***

-2.086*
161
.300
4.293*

.337

-.044

5.020***

-.225

28

Freedom from
difference

corruption

score

Fiscal freedom score difference

Gov. spending score difference

Beta

.371

.074

t-value

5.569***

.322

Beta

-.296

t-value

-4.381***

-.261

-2.287*

Beta

-.298

t-value

-4.421***

Beta
Business freedom score difference

.010
.078
.345

t-value
Beta

Labour freedom score difference

Monetary
difference

freedom

score

.275

5.205***

t-value

1.922*
.321

3.044**

Beta

.213

t-value

2.984**

Beta
Trade freedom score difference
Investment
difference
Financial
difference

freedom

score

-.081
-.918
.281

t-value
Beta
t-value

Freedom

score

-.108

4.049***

-1.007
.313

.047

4.655***

.431

Beta
t-value

Mode of payment - Cash

Beta

.155
5.020***

% Owned after transactions

t-value
Beta

4.675***

Deal size/Transaction Value

t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta

-.901
-.065
-.981
-.094
-1.369
.193

Related merger
Mode of acquisition Tender offer
Target ratio

.157
-.063

.346

.116

5.096***

.867

.161
2.287**

.143

.144

.183

.284

.154

.186

.174

.162

.197

1.956**

1.983**

2.576**

2.444**

2.049**

2.543**

2.414**

2.277**

1.952*

.177
2.439**

.147
1.969**

.146

.189

.261

.159

.186

.133

.176

.230

1.968*

2.568**

2.363**

2.045**

2.423**

1.808*

2.386*

2.362*

-.120
-1.734*
-.040
-.595
-.085
-1.217
.231

-.113

-.061

-.021

-.095

-.080

-.066

-.071

-.044

-1.625
-.061
-.908
-.059
-.837
.201

-.883
-.085
-1.300
-.123
-1.786 *
.236

-.201
-.173
-1.689*
-.154
-1.485
.354

-1.314
-.085
-1.226
-.091
-1.263
.206

-1.127
-0.068
-1.001
-.136
-1.906*
.234

-.935
-.109
-1.633
-.121
-1.736*
.246

-1.033
-.062
-.944
-.138
-1.992*
.194

-.485
-.122
-1.387
.049
-.520
.382

-.050
-.730
-.058
-.890
-.119
-1.747
.198

29

t-value

2.813***

2.944**

3.338**

2.898**

3.481**

3.020**

2.872**

3.352**

3.576**

2.845**

3.896*

Year effect
Country effect
R
R2
Adjusted R2
Wald chi2
sigma _
sigma_ e
rho

Table 8: Impact of difference of {property rights, freedom from corruption, fiscal freedom, Gov.spending, business freedom, labour freedom,
monetary freedom, trade freedom, investment freedom, financial freedom }on post acquisition performance with deal characteristics and preacquisition performance as control variables involving Acquirer from Emerging market and Target from Developed market (AETD)
This Table shows analysis using static random effects model for full sample. Values are coefficients and standard error in parenthesis, Dependent variable: Industry-adjusted
post-acquisition operating performance. *** Significant at 1%, ** Significant at 5%, * Significant at 10%.

Variable name
Constant
Sample size
Pre acquisition performance
Property rights score difference
Freedom
from
corruption
score
difference
Fiscal freedom score difference

t- value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

Gov. spending score difference

M1

M2

M3

M4

M5

M6

M7

M8

M9

M10

M11

-.719
39
.218
1.371
.364
2.019*

-.485
39
.208
1.319

-.706
39
.250
1.503

-.696
39
.243
1.443

-.480
39
.206
1.303

-.033
20
.202
.635

-.602
39
.228
1.318

-.624
39
.206
1.222

-.206
39
.168
1.010

-.372
39
.186
1.065

.566
39
.196
1.032
.187
.475
.196
.411
.036

.386
2.150**
.064
.338

Beta

-.013

30

0.092
.088

Business freedom score difference

Labour freedom score difference
Monetary freedom score difference
Trade freedom score difference
Investment freedom score difference
Financial Freedom score difference

t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

-.068

.247
.832
.070
.417
.182
1.116
.366
1.724*

DEAL
Mode of payment - Cash

Beta

.201
1.084

% Owned after transactions

t-value
Beta

.514

Deal size/Transaction Value

t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

.337
-.134
-.758
-.473
-2.652**
-.081
-.457

Related merger
Mode of acquisition Tender offer
Target ratio

.178
1.023

.235
.146
.383
--.039
.145
.024
.083
.168
.540
-.145
-.488

.363
2.162**

.089
.063

CHARACTERSTICS

.253
1.352

.168

.161

.264

-.178

.167

.206

.231

.231

.264

.854

.816

1.402

-.457

.853

1.051

1.205

1.132

1.170

.108
.633

.159
.841

.182

.129

.219

.182

.185

.047

.181

-.013

.994

.766

.722

1.018

1.055

.250

1.028

-.053

.140
.696
-.136
-.776
-.460
-2.612**
.024
.140

-.085
-.462
-.045
-.233
-.420
-2.239**
.051
.283

-.086

.061

-.082

-.070

-.044

.005

-.059

.189

-.467
-.020
-.110
-.419
-2.207**
.034
.177

.334
-.129
-.740
-.435
-2.486**
.114
.677

-.276
-.135
-.406
-.181
-.488
.154
.439

-.375
-.016
-.090
.182
-2.278**
023
.129

-.241
-.038
-.215
-.426
-2.310**
.039
.226

.027
-.126
-.697
-.424
-2.366**
.215
1.086

-.325
-.038
-.213
-.459
-2.436**
.085
.473

.734
-.233
-.985
-.465
-2.257*
.053
.199

Year effect
Country effect
R
R2
Adjusted R2
Wald chi2
sigma _
sigma_ e
rho

31

32

Table 9: Impact of Target {property rights, freedom from corruption, fiscal freedom, Gov.spending, business freedom, labour freedom,
monetary freedom, trade freedom, investment freedom, financial freedom } score on post acquisition performance with deal characteristics and
pre-acquisition performance as control variables involving Acquirer from Emerging market and Target from Developed market (AETD)
This Table shows analysis using static random effects model for full sample. Values are coefficients and standard error in parenthesis, Dependent variable: Industry-adjusted
post-acquisition operating performance. *** Significant at 1%, ** Significant at 5%, * Significant at 10%.
Variable name
Constant
Sample size
Pre acquisition performance
Target Property rights score
Target Freedom from corruption
score
Target Fiscal freedom score

t- value
Beta
t-value
Beta
t-value
Beta
t-value
Beta

M1

M2

M3

M4

M5

M6

M7

M8

M9

M10

M11

1.324
39
.242
1.500
-.273
-.1670

.297
39
.252
1.522

-.481
39
.230
1.384

-.210
39
.241
1.441

1.525
39
.226
1.428

.604
20
.249
.678

-.961
39
.273
1.603

1.248
39
.191
1.145

.465
39
.195
-.986

-.484
39
.186
1.065

.566
39
.196
1.032
-.560
-1.227
.362
.735
-.277

-.128
-.686
-.209

t-value
Target Gov. spending score
Target Business freedom score
Target Labour freedom score
Target Monetary freedom score
Target Trade freedom score
Target Investment freedom score
Target Financial Freedom score

-1.103

Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

Beta

.166

.240

-.384
2.007**
.249
.876
.166
.863
-.272
-1.466
.366
1.724*

DEAL
Mode of payment - Cash

.023
.138

-.586
-.058
-.133
-.120
-.303
--.267
.883
.112
.323
.180
-.733
-.074
-.305

-.160
-.811

.165

.256

.189

33

CHARACTERSTICS
.165

.250

-.184

.153

.217

.176

t-value
Beta

.879

% Owned after transactions

.756

Deal size/Transaction Value

t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

-.120
-.058
-.336
-.450
-2.489**
-.047
-.263

Related merger
Mode of acquisition Tender offer
Target ratio

.131
-.022

1.519

1.384

.850

1.319

-.479

.787

1.124

.908

.836

1.135

.143
.769

.189
.974

.106

.104

.193

.217

.121

.110

.175

.048

.535

.602

.663

1.190

.680

.577

.966

.179

.143
.769
-.059
-.317
-.427
-2.285**
-.003
-.016

-.032
-.171
-.089
-.477
-.441
-2.380**
.091
.505

-.085

.081

-.073

-.059

-.051

-.105

-.081

.091

-.472
-.051
-.283
-.443
-2.357**
.056
.314

.424
-.234
-1.178
-.404
-2.284*
.082
.487

-.244
-.143
-.430
-.162
-.445
.176
.497

-.320
-.018
-.100
.362
-1.829*
.036
.205

.257
-.085
-.475
-.465
-2.527**
.095
.540

-.583
-.045
-.252
-.384
-2.036**
-.127
-.986

-.429
-.021
-.118
-.424
-2.243**
.023
.138

.384
-.142
-.613
-.353
-1.672
.130
.577

Year effect
Country effect
R
R2
Adjusted R2
Wald chi2
sigma _
sigma_ e
rho

34

Table 10: Impact of Target {property rights, freedom from corruption, fiscal freedom, Gov.spending, business freedom, labour freedom,
monetary freedom, trade freedom, investment freedom, financial freedom } score on post acquisition performance with deal characteristics and
pre-acquisition performance as control variables involving Acquirer from Developed market and Target from Emerging market (ADTE)
This Table shows analysis using static random effects model for full sample. Values are coefficients and standard error in parenthesis, Dependent variable: Industry-adjusted
post-acquisition operating performance. *** Significant at 1%, ** Significant at 5%, * Significant at 10%.
Variable name
Constant
Sample size
Pre acquisition performance
Target Property rights score
Target Freedom from corruption
score
Target Fiscal freedom score

t- value
Beta
t-value
Beta
t-value
Beta
t-value
Beta

M1

M2

M3

M4

M5

M6

M7

M8

M9

M10

M11

-.172
111
.437
5.012***
-.172
-2.190**

-.021
111
.392
4.411***

-2.269
111
.452
5.126***

-1.653
111
.448
5.022***

.857
111
.413
4.781***

.1.379
47
.326
2.669

-1.076
111
.448
4.954***

-1.430
111
.446
4.935***

-.306
111
.444
5.097***

-1.062
111
.440
4.927***

-5.84
111
.426
4.666*
-.004
-.036
-1.21
-.951
-.064

-.210
-2.508**
.133

t-value
Target Gov. spending score
Target Business freedom score
Target Labour freedom score
Target Monetary freedom score
Target Trade freedom score
Target Investment freedom score
Target Financial Freedom score

.1691*

Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value
Beta
t-value

-0.51
-.609

.661
-.021
-.208
-.232
-1.948*
--.088
.903
.084
.843
-.083
-.593
.140
1.048

.061
-.756
-.235
-2.899**
-.069
.634
.025
.305
-.272
-1.466
-.178
-2.210**

DEAL
Mode of payment - Cash

Beta

.204
2.355**

% Owned after transactions

t-value
Beta

.137

.184
2.121**
.188

CHARACTERSTICS

.217

.218

.205

.375

.219

.216

.220

.210

.217

2.489**

2.466**

2.407**

3.117**

2.458**

2.442**

2.541**

2.367**

2.448*

.127

.137

.198

.288

.127

.128

.159

.145

.171

35

Deal size/Transaction Value

Related merger
Mode of acquisition Tender offer
Target ratio

t-value
Beta

1.538

t-value
Beta
t-value
Beta
t-value
Beta
t-value

-.326
.013
.167
-.024
-.283
.225
2.666**

-.026

2.057**
-.056
-.685
.019
.238
-.075
-.896
.241
2.845**

1.413

1.500

2.185**

2.459**

1.383

1.373

1.761

1.542

1.780*

-.023
-.281
.006
-.075
-.047
-.554
.209
2.457**

-.020

-.015

.034

-.016

-.020

-.008

-.081

-.042

-.241
.018
.219
-.044
-.514
.195
2.232**

-.187
-.017
-.213
-.075
-.904
.251
2.980**

-.317
-.109
-1.015
.002
.019
.427
3.527**

-.198
.020
.241
.042
-.495
.208
2.417**

-.236
.016
.199
-.037
-.425
.206
2.367**

-.094
-.014
-.174
-.061
-.733
.237
2.786**

-.015
.013
.164
-.051
-.592
.205
2.379**

-.497
--.010
-.115
-.063
-.692
.285
3.069*

Year effect
Country effect
R
R2
Adjusted R2
Wald chi2
sigma _
sigma_ e
rho

36