Open AccessPosted Content
Do Managerial Objectives Drive Bad Acquisitions
Reads0
Chats0
TLDR
This article found that the returns to bidding shareholders are lower when their firm diversifies, when it buys a rapidly growing target, and when the performance of its managers has been poor before the acquisition.Abstract:
This paper documents for a sample of 327 US acquisitions between 1975 and 1987 three forces that systematically reduce the announcement day return of bidding firms. The returns to bidding shareholders are lower when their firm diversifies, when it buys a rapidly growing target , and when the performance of its managers has been poor before the acquisition. These results are consistent with the proposition that managerial rather than shareholders' objectives drive bad acquisitions.read more
Citations
More filters
Posted Content
A Survey of Corporate Governance
TL;DR: The authors surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems around the world, and presents a survey of the literature.
BookDOI
Financial development and economic growth : views and agenda
Ross Levine,Ross Levine +1 more
TL;DR: The authors argued that the preponderance of theoretical reasoning and empirical evidence suggests a positive first-order relationship between financial development and economic growth, and that financial development level is a good predictor of future rates of economic growth.
Journal ArticleDOI
Information Asymmetry, Corporate Disclosure and the Capital Markets: A Review of the Empirical Disclosure Literature
TL;DR: Corporate disclosure is critical for the functioning of an efficient capital market as mentioned in this paper, and firms provide disclosure through regulated financial reports, including the financial statements, footnotes, management discussion and analysis, and other regulatory filings.
Posted Content
Stock markets, banks, and economic growth
Ross Levine,Sara Zervos +1 more
TL;DR: In this paper, the authors investigate whether measures of stock market liquidity, size, volatility, and integration in world capital markets predict future rates of economic growth, capital accumulation, productivity improvements, and private savings.
Journal ArticleDOI
Enjoying the Quiet Life? Corporate Governance and Managerial Preferences
TL;DR: The authors used variation in corporate governance generated by state adoption of antitakeover laws to empirically map out managerial preferences and find that when managers are insulated from takeovers, worker wages (especially those of white-collar workers) rise.
References
More filters
Journal ArticleDOI
The Hubris Hypothesis of Corporate Takeovers
TL;DR: The hubris hypothesis is advanced as an explanation of corporate takeovers by Jensen and Ruback as mentioned in this paper, who argued that the evidence supports the hubris hypotheses as much as it supports other explanations such as taxes, synergy, and inefficient target management.
Journal ArticleDOI
Risk reduction as a managerial motive for conglomerate mergers
Yakov Amihud,Baruch Lev +1 more
TL;DR: In this article, a manager's motivation for a conglomerate merger is investigated. And the authors show that managers engage in conglomerate mergers to decrease their largely undiversifiable "employment risk" (i.e., risk of losing job, professional reputation, etc.).
Journal ArticleDOI
Management entrenchment: The case of manager-specific investments
Andrei Shleifer,Robert W. Vishny +1 more
TL;DR: In this article, the authors describe how managers can entrench themselves by making manager-specific investments that make it costly for shareholders to replace them, by reducing the probability of being replaced and obtaining more latitude in determining corporate strategy.
Journal ArticleDOI
Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firms
TL;DR: In this paper, the authors provide a theoretical analysis of the process of competition for control of the target and empirical evidence that competition among bidding firms increases the returns to targets and decreases the return to acquirers, and that the supply of target shares is positively sloped.
Journal ArticleDOI
Value Maximization and the Acquisition Process
Andrei Shleifer,Robert W. Vishny +1 more
TL;DR: In this paper, the authors assess the acquisition process from the managerial perspective and find that making acquisitions is often just the quickest and easiest way for managers to expand the scope of their control by directing the firm's cash flows into new ventures.