When Arturo Bris and Christos Cabolis — fellows at the Yale School of Management International Center for Finance — set out to discover how international mergers affect foreign and domestic industries, they expected to confirm their suspicions that globalization shortchanges developing countries when foreigners acquire their companies.

But what they found defied their expectations — and their research, currently under revision for publication — has caught the attention of economists and academic journals.

“We wanted to find an anti-globalization argument in cross-border mergers, but instead, what we found were some advantages of globalization,” Bris said.

Their study, the most comprehensive of its kind, amasses a wealth of data — 9,277 international mergers from 1985 to 2000 — and is a ground-breaking foray into a previously unexplored area of research. They arrived at two principal conclusions.

When a firm in a country with better corporate governance takes over a foreign firm, the nationality of the foreign firm changes, along with the commercial codes that govern it.

Increased investor protection, provided by these changes in commercial codes, increases the value of the foreign industry in which the target firm operates and does not significantly affect domestic industry, Bris and Cabolis said.

For example, when Nabisco acquired Canale, an Argentine cookie manufacturer, Canale became an affiliate of the American firm. U.S. law now protects Canale’s investors, increasing the value of the industry in Argentina.

“Say an American firm merges with an Argentine firm,” explained Cabolis, former dean of Jonathan Edwards College. “The value of the American industry would not be significantly affected, and the value of the Argentinian industry would rise.”

Previous studies have documented changes in investor protection, which were precipitated by changes in the legal system. But this is the first report to examine the effects cross-border mergers have on the legal system and investor protection over a time period and in numerous countries.

“This is the beauty and significance of our study,” said Bris.

The manifold implications of the study for the future of the global economy have begun to ripple through the corporate world. And though the paper is still unpublished, economic journals have already begun to cite the professors’ work, which they have presented at universities across the country and at the World Bank.

“Now that markets are becoming more integrated, we see more of these cross-border mergers, and therefore we observe a kind of convergence in corporate governance practices,” Cabolis said.

Cabolis and Bris mentioned that although reception of their study has thus far been positive, one could object to the indices they have used to measure how good or bad corporate governance in a given nation is.