PurposeDrawing upon the eclectic paradigm and the regulative dimension of institutional distance theory, it is posited that to understand a firms’ cross-border merger and acquisition (CBMA) location choices, it is critical to examine the acquirers’ ownership advantages.Design/methodology/approachUsing a sample of CBMAs undertaken by US firms from 1999 to 2015, the paper explores the extent to which acquiring firm ownership advantages – financial and innovation capabilities – influence target firm country selection in relation to regulative distance.FindingsIt is shown that acquiring firms with greater innovative capabilities are likely to choose target firms in nations with less regulative distance from their home market; whereas firms with greater financial capabilities target firms in more distant nations.Originality/valueThis paper builds on the important research on CBMA activity, focusing on the largely neglected pre-acquisition resources in relation to the regulative distance between target firms and the acquirer.
