Abstract
This paper explores whether social ties, proxied by Facebook friendship links, can explain why the number and value of mergers and acquisitions (M&As) are greater within countries than between countries. We find that social ties are positively correlated with the number and value of M&As. We also demonstrate that the home bias in M&As is greatly reduced once we control for the differences in social ties between and within countries. We further find that social ties particularly facilitate M&As when the level of corruption is high, press freedom is limited in the target country, and there are more cultural differences between the acquirer and target countries.
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