This study re-examines the determinants of short-term market reactions in cross-border mergers and acquisitions (CBMAs) initiated by emerging market multinationals (EMMs). We specifically examine how these traditional drivers shift during the period of a global crisis. Employing an event study methodology on a comprehensive sample of 1,289 CBMAs announced by acquirers across 10 major emerging economies from 2009 to 2021, we analyze the shareholder wealth effects surrounding the announcement dates. The findings reveal that, on average, CBMAs initiated by EMMs generate positive and statistically significant short-term wealth for acquirer shareholders, supporting the synergy theory. The study extends the institution-based view by incorporating country-level sustainability orientation as a determinant of short-term market reactions and identifies a preliminary non-linear relationship between sustainability distance and acquirer returns. While investors typically preferred risk-sharing (payment through stock) and diversification strategies in stable times, there is preliminary evidence of a shift in these patterns during the COVID-19 pandemic. The conventional market penalty for cash payments disappeared, and investors rewarded horizontal deals during the crisis period. These findings advance the value creation theory, institutional-based view and crisis management literature, offering insights for managers and policymakers navigating the dual challenges of global expansion and economic volatility.
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