Resumen
The phenomenon of equity stake purchases by institutional investors has become increasingly common in Japan. In this paper, we investigate how the post-acquisition performance of target firms differs across domestic versuscross border and friendly versus unfriendly equity stake purchases. We apply two contrasting concepts e.g. the arms-length principle and geographicproximity theory. Our results partially confirm that Japanese equity stakepurchased target firms in an unfriendly attempt performed better immediately after the deal. Subsequently, the performance was significantly higher for equity stake purchased target firms by cross border institutional investors compared to domestic ones. After the purchase, the number of significantly for Japanese and for friendly attempts but increased for cross border and unfriendly ones. Implications of these outcomes are discussed.Keywords: Institutional Investors, Cross-border M&A, Arms-length Principle,Geographic Proximity Theory, Friendly vs. Unfriendly Takeovers