Sovereign wealth funds investment effects on target firms' competitors

Narjess Boubakri, Jean Claude Cosset, Jocelyn Grira

Research output: Contribution to journalJournal Articlepeer-review

27 Citations (Scopus)


We investigate the impact of sovereign wealth funds acquisitions (SWFs) on the performance of target firms' competitors. We find a positive and significant impact of SWFs acquisitions on target firms' competitors. This means that market participants anticipate value creation in the targets competitors, due to likely expected restructuring activities. Further analysis shows that relatively large rivals, low leveraged rivals, rivals with highly correlated returns with those of their corresponding targets, rivals in less competitive industries show higher abnormal returns upon the acquisition announcement. Our results question the rationality of protectionism as legal barriers to sovereign wealth funds cross-border investments.

Original languageEnglish
Pages (from-to)96-112
Number of pages17
JournalEmerging Markets Review
Publication statusPublished - 1 Mar. 2017


  • Cumulative abnormal returns
  • Intra industry effects
  • Sovereign wealth funds


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