M&A transactions in the Russian market: The impact of corporate boards’ attributes

Abstract

The paper delves into the impact of corporate boards’ attributes on the efficiency of mergers and acquisitions (M&A) transactions in the Russian market and formulates recommendations on improving corporate governance practices in Russia. The article bridges a gap in research on boards of directors whose characteristics serve as strong signals to the capital market about the quality of corporate governance and protection of investors’ interests. Methodologically, the study rests on agency theory and the theories of mergers and acquisitions. The research hypotheses about the effect of board characteristics on M&A transactions were tested using the least square method to construct a linear regression. The transaction efficiency was assessed using the cumulative abnormal return (CAR) model. The empirical data were retrieved from Annual Reports and ZEPHYR Bureau van Dijk and covered 55,436 mergers and acquisitions from 2000 to 2020, of which 659 transactions satisfied the strict criteria and were selected for further analysis. We found a statistically significant relationship between the board characteristics of the acquiring company and the efficiency of mergers and acquisitions. The obtained results contribute to the development of a new research avenue on network-based interaction between boards of the companies participating in transactions and the involvement of boards of other firms.