Does Takeover Activity Cause Managerial Discipline? Evidence From International M&amp;A Laws

Lel, Uǧur; Miller, Darius P.

doi:10.2139/ssrn.1730316

Cited by 30 publications

(77 citation statements)

References 59 publications

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“…Table 1 presents the sample composition. The numbers reported are in line with prior studies, including Rossi and Volpin (2004), Erel, Liao and Weisbach (2012), Ahern et al (2015) and Lel and Miller (2015), and thus do not warrant detailed discussion. Panel A reports the time distribution of deals.…”

Section: Sample Composition and Data Sourcessupporting

confidence: 52%

“…For our deal-level analyses we further control for other deal-level, firmlevel and country-pair characteristics. All control variables employed have been shown by existing research to be associated with M&A activity and gains (e.g., Rossi and Volpin, 2004;Billet and Xue, 2007;Masulis et al, 2007;Bris et al, 2008;Erel et al, 2012;Ahern et al, 2015;Lel and Miller, 2015). All the variables used in the analyses are further detailed in Table A1.…”

Section: Other Determinants Of Takeoversmentioning

confidence: 99%

“…They find that the Tobin's Q of an industry is positively related to the percentage of the market capitalization in the industry that is acquired by firms coming from countries that are more protective. Bris, Cabolis and Janowski (2010) and Lel and Miller (2015) document that countries adopting takeover and anti-trust laws experience an increase in aggregate M&A activity. Ahern, Daminelli and Fracassi (2015) highlight the role of national culture in merger decisions around the world.…”

Section: Introductionmentioning

confidence: 99%

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Collective bargaining and mergers and acquisitions activity around the world

Ahmad

Lambert

2019

Journal of Banking & Finance

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Our results highlight the importance of collective bargaining on the pattern of takeover activity in 46 countries from the early 1990s. We find that the frequency and volume of takeovers within industries increase in countries with powerful labor unions and high coverage of bargaining coordination. Economically, collective bargaining largely offsets the negative effect of tighter employment protection legislations on takeovers documented in prior works. Further analyses show that collective bargaining encourages takeover activity by allowing acquirers to extract higher rents held by employees but also by facilitating the pre-completion phase of deals. Our results provide new insights into the real effects of collective bargaining in the context of takeovers around the world.

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Section: Sample Composition and Data Sourcessupporting

confidence: 52%

Section: Other Determinants Of Takeoversmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Collective bargaining and mergers and acquisitions activity around the world

Ahmad

Lambert

2019

Journal of Banking & Finance

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“…Takeover law is a dummy variable that is equal to one if there is a takeover law in a country in a given year and zero otherwise. We follow Lel and Miller () in constructing this proxy. Rule of law represents an assessment of the law and order tradition in the country and is taken from Andrei Shleifer's Web site (see LaPorta et al.…”

Section: Distress Effect and Country Characteristicsmentioning

confidence: 99%

Distress Anomaly and Shareholder Risk: International Evidence

Eisdorfer¹,

Goyal²,

Zhdanov

2018

Financial Management

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Financially distressed stocks in the United States earn puzzlingly low returns giving rise to the distress risk anomaly. We provide evidence that the anomaly exists in developed countries, but not in emerging ones. Using cross-country analyses, we explore several potential drivers of returns to distressed stocks. The distress anomaly is stronger in countries with stronger takeover legislation, lower barriers to arbitrage, and higher information transparency. In contrast, shareholder bargaining power and expected stock return skewness in a country do not affect the anomaly. These findings suggest that various aspects of shareholders' risk play an important role in shaping distressed stocks returns.

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“…Further, in Column (5), we control for the changes of takeover legislation that might have coincided with the anti‐cartel enforcement legislation if the countries changed multiple policies at the same time. We draw the list of merger legislation changes from Lel and Miller (), and we control for it in our estimations. The confounding legislation does not alter the effect of leniency laws on margins or on merger activity.…”

Section: Robustness To Confounding Policies and Economic Trendsmentioning

confidence: 99%

The effects of global leniency programs on margins and mergers

Dong

Massa

Žaldokas

2019

The RAND J of Economics

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In a cross‐country study, we investigate how staggered passage of national leniency programs from 1990–2012 has affected firms’ margins and merger activity. We find that these programs, which give amnesty to cartel conspirators that cooperate with antitrust authorities, reduced the gross margins of the affected firms. However, firms reacted to new regulations by engaging in more mergers that had negative effects on downstream firms. Our results imply that although these programs were generally effective, their full potential was mitigated by mergers that substitute for cartels, and that a strong merger review process might be a prerequisite for strengthening anti‐collusion enforcement.

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Does Takeover Activity Cause Managerial Discipline? Evidence From International M&A Laws

Cited by 30 publications

References 59 publications

Collective bargaining and mergers and acquisitions activity around the world

Collective bargaining and mergers and acquisitions activity around the world

Distress Anomaly and Shareholder Risk: International Evidence

The effects of global leniency programs on margins and mergers

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