A&F seminar: Climate Theory and Managerial Decisions on Cross-Border Mergers

We explore the significance of climate theory concerning managerial decisions in cross-border mergers. We report that temperature offers a good familiarity proxy showing that country pairs that experience little (large) distance in temperature experience relatively more (less) acquisitions. We then highlight the significance of relatively warm temperatures on managerial decisions. We find that the relationship is driven by the Summer months; during June-August for country pairs in the Northern hemisphere and during December-February for pairs in the Southern hemisphere. Relatively more cross-border mergers also occur towards countries with modest warmer temperatures showing evidence of managerial affinity towards warmer places.