We present large sample evidence on the performance of
domestic and U.S. (foreign) bidder firms acquiring
Canadian targets. Domestic bidders earn
significantly positive average announcement period
abnormal returns, while U.S. bidder returns are
indistinguishable from zero. Measures of pre- and
post-acquisition abnormal accounting performance are
also consistent with a superior domestic bidder
performance. Domestic bidder announcement returns
are, on average, greatest for offers involving stock
payment and for the bidders with the smallest equity
size relative to the target. Neither direct foreign
investment controls, horizontal product market
relationships, nor acquisition propensities explain
why domestic bidders outperform their U.S.
competitors.