Vol 17, No 3 (2023)

Asian emerging markets exemplify the contemporary trend of glocalization (globalization-localization). Countries in this region have strong cultural bonds shaped by the influence of Confucianism, which has given rise to a distinctive approach to conducting business, including the realm of mergers and acquisitions. The homogeneity of cultural values fosters trust among parties even in cross-border transactions, impacting the assessment of transaction premiums. Simultaneously, within this region, a cluster of Asian Tiger countries distinguishes itself by leading in technological advancements, particularly in the realm of digitalization. The escalating competitiveness of technologically advanced companies further influences estimates of transaction premiums.

This paper endeavors to delve into the theoretical aspects of these issues and substantiate, through empirical evidence, the cultural impact of Confucianism and technological progress on mergers and acquisitions (M&A). Our research is grounded in a database encompassing 2677 cross-border deals compiled from January 1, 2002, to January 1, 2021, for 10 burgeoning Asian markets. This study marks the first exploration of M&A deal value and firm valuation during transactions utilizing a glocal region as a case study. Our primary findings substantiate the notion that cultural affinities exert a substantial influence on M&A deal values, with a propensity for lower values among culturally similar countries. Congruent cultural values build trust among stakeholders and safeguard from additional risks. These results give policymakers and business entities an opportunity to adjust their decisions and refine their comprehension of factors that shape the economy.

The article examines the financial contagion of Russian companies during the pandemic COVID-19. Financial contagion refers to the strengthening of interconnections between segments of the financial market during a crisis, when turbulence from one market is transferred to others, and the relationship between parameters goes beyond normal market interactions. The study involved shares of 27 companies in the energy, financial, telecommunications, consumer and raw materials sectors of the Russian economy. As exogenous variables supposedly influencing the market values of these companies, we tested the rouble exchange rate against the US dollar, the spot price of Urals oil and the yield on annual government bonds (proxies for the cost of borrowings). Identification of the potential contagion period was based of the sliding coefficient of variation of these variables. The construction of VARX models convincingly proved the increasing influence of the exchange rate and the bond yield rate on the fundamental (market) return of Russian companies in the short term (during the acute phase of the pandemic) and the delayed impact of oil prices on it, which manifested itself during the chronic crisis. Contagion testing was also carried out on the basis of a change (growth) in the coefficient of determination in the acute phase of the pandemic as compared to the pre-crisis and post-crisis periods. For a more accurate assessment of the contribution of each variable to contagion, we used the method of source decomposition of the coefficient of determination with a correction for heteroscedasticity. This made it possible to identify the companies most vulnerable to financial contagion during the pandemic, and the sources of their contagion, as well as the market segments that showed the greatest resilience. The study can be useful for managers in maintaining their companies’ market value, for investors in effective portfolio diversification, and for public authorities when pursuing a policy of financial stabilization in a crisis. The limitations of the study are related to the imperfections of the VARX models method, as well as to the specifics of the pandemic crisis, the conclusions from which can only be partially applied to other types of crises.

This study involves the compilation of a database detailing the exit of foreign companies from Russia in 2022 and the identification of their primary exit strategies. The current situation is unprecedented in its scale and has no analogues in the history of the Russian economy, therefore, it has not been sufficiently studied yet. A total of 28 industries across 25 countries were selected for the initial study. Through an analysis of exit patterns, nine primary strategies were identified, including joint venture exits, soft closings, sales to local buyers, suspension, liquidation, management buyouts, selling shares to partners, carving out to local legal entities, and sales to foreign buyers. The subsequent research stage focused on the oil and gas industry and examined the cases of its five leading companies: Shell, TotalEnergies, Equinor, Exxon-Mobil, and BP. It assessed both financial and non-financial losses incurred by these companies due to their decisions to withdraw from the Russian market. Financial losses were determined using the Discounted Cash Flow method and the Economic-Value-Added valuation method, while non-financial factors were assessed through operational indicators such as reserves and oil and gas production. The fundamental value of the above-mentioned companies was shown to comprise to $20.6 billion, $1.1 billion, $0.5 billion, $17.8 billion, and $36.5 billion, respectively. The study revealed that companies with strategically important and substantial projects in Russia, notably BP and TotalEnergies, pursued a “soft” exit strategy. Despite their decision to exit Russia, these companies continued to receive dividends and effectively retained ownership shares in assets, even though financial statements reflected impairments.

The influence of inclusive growth strategy on corporate financing policies is examined within the metals and mining industry. A dataset comprises 212 of the largest publicly traded companies observed from 2016 to 2021. An econometric analysis revealed no significant effect of inclusion indicators on the financing policies of these companies. However, a positive association between the corporate resource efficiency and leverage levels was observed. Though no single inclusion indicator influences the volume of sustainable financing, the indicator of human rights compliance positively impacts the number of such financing arrangements. Furthermore, only the levels of emission reduction and the extent of improvement in living standards of local communities significantly influence the cost of capital (with a positive dependence for the former, and a negative dependence for the latter). Inclusion indicators have little impact on the capital structure, with leverage levels largely determined by metals pricing dynamics. Higher levels of inclusion correlate with increased utilization of sustainable financing. The findings can be used when implementing inclusive growth strategies in the metals and mining industry as well as when deciding on the financing of projects within this sector. We believe that analysis of other industries and a longer period of time, different results may be obtained. This is, on the one hand, a limitation of this work, and on the other hand, an area for further research.