How Buyers Cope with Uncertainty when Acquiring Firms in Knowledge-Intensive Industries: Caveat Emptor

Ulrich, Karl T.; Ellison, David J.; Coff, Russell

doi:10.1287/orsc.10.2.144

Cited by 274 publications

(275 citation statements)

References 60 publications

(68 reference statements)

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“…The level of information asymmetry can also be inferred from the nature (tangible/intangible) and extent of the existing assets of the company. Companies that hold mainly intangible assets are more difficult to evaluate than those ones that possess assets for which market prices exist (Coff, 1999). The higher the efforts in research and development within a company or within a related branch, the more difficult it is to judge the future potential for success of the company from the viewpoint of a third party.…”

Section: Motivation For Using Earn-outsmentioning

confidence: 99%

“…The higher the efforts in research and development within a company or within a related branch, the more difficult it is to judge the future potential for success of the company from the viewpoint of a third party. If the buyer comes from a different line of business, it will be harder for him to get an idea about the potential future development of the company compared to someone who is familiar with the existing markets and technologies of this particular branch of industry (Coff, 1999). If the buyer and seller come from different nations, it is clear that the buyer has a knowledge deficit regarding the culture, habits, institutional circumstances, and market conditions of the target nation (Mantecon, 2009, p. 640).…”

Section: Motivation For Using Earn-outsmentioning

confidence: 99%

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Earn-outs to bridge gap between negotiation parties – curse or blessing?

Toll

Rolinck

2017

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Section: Motivation For Using Earn-outsmentioning

confidence: 99%

Section: Motivation For Using Earn-outsmentioning

confidence: 99%

Earn-outs to bridge gap between negotiation parties – curse or blessing?

Toll

Rolinck

2017

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“…M&A transactions generally involve information asymmetries between targets and acquirers which are associated with adverse selection costs. Literature suggests several ways of coping with asymmetric information involved in corporate acquisitions, such as stock payments as opposed to cash (Eckbo et al, 1990) or an extended negotiation period allowing for a closer evaluation of the target (Coff, 1999).…”

Section: The Market For Corporate Control In Entrepreneurial Firmsmentioning

confidence: 99%

Corporate governance in newly listed companies

Audretsch

Lehmann

2013

Handbook of Research on IPOs

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Corporate governance in newly listed companiesTopics in corporate governance have been around in the literature almost for a century, most of the theoretical and empirical work has focused on the large and public company. While this research has improved our understanding of how large corporations are governed, corporate governance in small and medium sized enterprises and in particular in entrepreneurial and newly listed firms has rarely been studied. This essay offers a reflective overview of corporate governance mechanisms in entrepreneurial and newly listed companies and of why and how governance mechanisms differ from those in large and publicly traded corporations. In contrast to the traditional approach in corporate governance, we do not rely on the agency perspective as a work-horse to analyze governance problems. Instead we focus on either market or institutional based mechanisms in corporate governance. This opens the view on governance problems in newly listed companies outside the narrow view of either an agency or free-market perspective. Instead, the following study tries to bridge the different perspectives on corporate governance. From the broad set of mechanisms in corporate governance discussed in the literature, we focus only on a small subset which is prevalent in newly listed companies like the product and capital market, the market for corporate control, boards of directors and capital structures.-work in progress - UO-Working-Paper Series 03-13 AbstractTopics in corporate governance have been around in the literature almost for a century, most of the theoretical and empirical work has focused on the large and public company. While this research has improved our understanding of how large corporations are governed, corporate governance in small and medium sized enterprises and in particular in entrepreneurial and newly listed firms has rarely been studied. This essay offers a reflective overview of corporate governance mechanisms in entrepreneurial and newly listed companies and of why and how governance mechanisms differ from those in large and publicly traded corporations. In contrast to the traditional approach in corporate governance, we do not rely on the agency perspective as a work-horse to analyze governance problems. Instead we focus on either market or institutional based mechanisms in corporate governance. This opens the view on governance problems in newly listed companies outside the narrow v...

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“…A firm that is steeped in the relevant knowledge base is better able to recognize the value of acquisition candidates during the search process. In addition, when a firm and its acquisition candidates draw on similar knowledge bases, relatedness helps the firm to assess acquisition candidates (Coff, 1999). As such, relatedness enables a firm to better evaluate the resources and capabilities of acquisition candidates who compete inside the firm's primary business domain.…”

Section: Inside the Primary Business Domainmentioning

confidence: 99%

“…A firm's industry and a class of industry are considered to be more related if the intensity of resource utilization is more similar. Measures have been based on occupational categories (Farjoun, 1994;Coff, 1999), patents (Silverman, 1999), and other resource inputs such as R&D, advertising, and capital expenditures (Chang and Singh, 1999).…”

Section: Dynamic Measures Of Firm-market Relatednessmentioning

confidence: 99%