Corporate Governance and Acquirer Returns

Masulis, Ronald W.; Wang, Cong; Xie, Fei

doi:10.2139/ssrn.697501

Cited by 564 publications

(1,008 citation statements)

References 61 publications

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“…To the extent that policy uncertainty can act as an external disciplinary force, we expect its positive effect on M&A performance to be stronger for acquirers with poor corporate governance. To explore this possibility, similar to previous research (e.g., Masulis et al (2007)), we use the index of Gompers, Ishii, and Metrick (GIM) (2003), which measures the number of antitakeover provisions that a firm adopts, and blockholder ownership as proxies for external and internal corporate governance, respectively. GIM index values range from 0 to 24.…”

Section: Robustness Checksmentioning

confidence: 99%

Policy Uncertainty and Mergers and Acquisitions

Nguyen¹,

Phan²

2017

J. Financ. Quant. Anal.

406

198

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This research examines the relationship between policy uncertainty and mergers and acquisitions (M&As). We find that policy uncertainty is negatively related to firm acquisitiveness and positively related to the time it takes to complete M&A deals. In addition, policy uncertainty motivates acquirers to use stock for payment and to pay lower bid premiums. Acquirers, on average, create larger shareholder value from M&A deals undertaken during periods of high policy uncertainty, which is attributable to their prudence as well as the wealth transfer from the financially constrained targets to acquirers.

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Section: Robustness Checksmentioning

confidence: 99%

Policy Uncertainty and Mergers and Acquisitions

Nguyen¹,

Phan²

2017

J. Financ. Quant. Anal.

406

198

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show abstract

“…For each acquisition, information on either deal value or target sales must have been available one fiscal year prior to the announcement date. The acquisition had to have a relative size of at least one percent (Masulis et al 2007), measured as an index of target sales to bidder sales and/or deal value to bidder market capitalization 20 days before the announcement date of the acquisition. Based on this criteria set, the initial sample consisted of 2,220 acquisitions announced by 329 bidders.…”

Section: Samplementioning

confidence: 99%

Lost in transaction? The transfer effect of strategic consistency

Fehre

Kronenwett

Lindstädt

et al. 2015

Bus Res

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Prior empirical studies provide evidence that the learning-curve perspective from manufacturing settings is not directly applicable to strategic management settings. In the latter case learning relates to the quality rather than to the quantity of experience. Regarding the antecedents of organizational learning especially, there are still unanswered questions remaining; for example, the questions what kind of experience has a positive effect on performance and what kind of experience is more of a hindrance than a help. This becomes obvious when looking at acquisitions as examples of strategic management decisions. Results of prior empirical studies analyzing the relationship of acquisition experience and acquisition performance have been mixed. By introducing the concept of strategic consistency, we intend to facilitate a better understanding of the kind of experience necessary for organizational learning. Therefore, we measure the concordance and frequency of change in strategic actions. Employing a sample of 379 acquisition series, we find evidence for a positive transfer effect of strategic consistency within series and, therefore, a positive relationship between strategic consistency and acquisition performance.

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“…In extension, Masulis et al (2007) report supporting evidence to the claim of Gompers et al (2003) by showing that the announcement abnormal return of an acquisition is higher the better the firm governed (the lower the G-Index or the number of ATPs). In other words, investors evaluate acquisition decisions Special thanks are due to Chul-Eung Kim and Taeyoung Park.…”

Section: Introduction mentioning

confidence: 85%

“…Based on these three key references (Gompers et al, 2003;Masulis et al, 2007;Chang et al, 2015), we expect an association between corporate governance and the stock returns of Korean listed companies. Also, the return on an arbitrage portfolio based on portfolios sorted per degree of corporate governance may explain the cross-section of returns of individual stocks.…”

Section: Introduction mentioning

confidence: 99%

How does corporate governace pay off? Evidence from Korean stock listings

Choi

Choi²,

Son

2016

Investment Management and Financial Innovations

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Corporate governance is an envelope for the mechanisms, processes and relations through which corporations are controlled and guided. Consequently, corporate governance affects operational performance and, in turn, stock returns, as Gompers et al. (2003) find. In this research, we use the Korea Corporate Governance Stock Price Index (KOGI) to test a possible linkage between corporate governance and shareholder wealth in Korea. Factor mimicking portfolios sorted per KOGI are constructed to estimate a corporate governance risk factor ("good minus bad"). By augmenting this new factor to the existing factor models (Fama and French, 1993;Carhart, 1997) to fit multiply imputed data, we find evidence that corporate governanceinfluences stock pricing in Korea.JEL Classification: G11, G12, G34, C11.

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Corporate Governance and Acquirer Returns

Cited by 564 publications

References 61 publications

Policy Uncertainty and Mergers and Acquisitions

Policy Uncertainty and Mergers and Acquisitions

Lost in transaction? The transfer effect of strategic consistency

How does corporate governace pay off? Evidence from Korean stock listings

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