The effect of board size on shareholder value: Evidence from bank mergers and acquisitions

Tampakoudis, Ioannis; Nerantzidis, Michail; Artikis, Panagiotis G.; Kiosses, Nikolaos

doi:10.1016/j.emj.2022.09.002

Cited by 5 publications

(2 citation statements)

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“…Past few decades, the corporate governance of banks has attracted the attention of scholars from both developed and developing countries (Aslam et al , 2019b; Faisal et al , 2016). Numerous current findings show that independent, well-diversified and small boards play a crucial role in enhancing a bank’s performance (Aslam and Haron, 2020b; Chazi et al , 2018; Tampakoudis et al , 2022). Moreover, Aslam and Haron (2020c) noted that a well-diversified organizational board monitors the manager’s and CEO’s decisions more efficiently and effectively and thus helps to increase the wealth of shareholders and reduce agency costs.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 80%

The mediating role of intellectual capital in corporate governance and financial efficiency of Islamic banks

Aslam

Rehman

Iqbal

2023

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Purpose The purpose of this study is to investigate the mediating role of intellectual capital (IC) on the association between corporate governance mechanism (CGM) and the financial efficiency of Islamic banks (Z-score, net investment income and loan to deposit) and verify it through standard mediation in the panel based on interaction. Design/methodology/approach The data of this study draws from 125 full-fledged Islamic banks and windows from 26 Organization of Islamic Cooperation (OIC) over the period of 2009 to 2019. A two-step system generalize method of moment estimation is used to test the hypotheses. Findings The results underwrite that the inclusion of IC as a mediating variable has influenced positively the corporate governance and financial efficiency of IBs. Besides, only CEO power and Shariah supervisory board positively affect the financial efficiency of IBs. While structural capital and relational capital positively affect the financial efficiency of IBs. Apart from that, results show that the CGM has a significant relationship with the IC value of IBs. Research limitations/implications These findings are valuable for policymakers and regulators to set policies to improve CG structure and effective use of IC resources to improve banking efficiency. Additionally, findings might be helpful for the bankers to proficiently use the IC as a premise to plan new strategies to get an upper hand in financial performance. Originality/value This study extends and contributes to the current literature by analysing the role of IC along with CG to boost the financial efficiency of banks in OIC countries.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 80%

The mediating role of intellectual capital in corporate governance and financial efficiency of Islamic banks

Aslam

Rehman

Iqbal

2023

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“…1. More broadly, studies examining the extent to which managerial procedures contribute to favorable takeover outcomes (Tampakoudis et al ., 2022; Delis et al ., 2022) and investigations into the impact of a country's economic policies on takeover gains (Shams et al ., 2022) typically rely on percentage excess returns as their dependent variables. These papers might reach different conclusions if their focal variables were based on the monetary ( pound , in the UK context) excess returns acquired by the M&A parties instead.…”

Section: Notesmentioning

confidence: 99%

How do takeovers in the United Kingdom split value gains between domestic deals' parties?

da Graca

2023

JBSED

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PurposeThis paper aims to address the question: What is the distribution of value (in pounds) created in a sample of domestic takeovers in the United Kingdom from 2013 to 2020 among acquirer and target stockholders?Design/methodology/approachThe author employs a traditional event study methodology to calculate the percentage excess returns of companies on the announcement date. These returns are then converted into pound-denominated excess returns using the companies' market capitalizations. This allows the author to estimate the synergies of the mergers and acquisitions (M&As) and how they are allocated between acquirers and targets. This innovative transformation from percentage to pound excess returns establishes a new ratio methodology for addressing the paper's objective.FindingsThis paper reveals that in UK takeovers, 40 percent of the synergies in pounds are allocated to the stockholders of acquiring companies, while 60 percent go to the stockholders of target companies. In other words, acquirers retain a significant portion—more than half—of the synergies generated in these domestic deals. This original finding is statistically significant at the one percent level and strongly contradicts the hypothesis that acquirers, at best, merely break even.Originality/valueThe evidence that UK takeovers distribute value gains nearly equally between domestic deal parties challenges the enduring conventional insight in the M&A literature. This conventional wisdom suggests that the value created by business combinations is entirely distributed to target company stockholders. Consequently, this reexamination may have broader implications, offering an alternative perspective on the motives behind business combinations. This perspective differs from the “managerial hubris hypothesis,” which aligns with the prevailing conventional insight but receives limited support in the original finding reported here.

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Boundary spanning and boundary breaking research in M&A: Taking stock and moving forward to reinvent the field

Thanos

Angwin²,

Bauer³

et al. 2022

European Management Journal

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The effect of board size on shareholder value: Evidence from bank mergers and acquisitions

Cited by 5 publications

References 58 publications

The mediating role of intellectual capital in corporate governance and financial efficiency of Islamic banks

The mediating role of intellectual capital in corporate governance and financial efficiency of Islamic banks

How do takeovers in the United Kingdom split value gains between domestic deals' parties?

Boundary spanning and boundary breaking research in M&A: Taking stock and moving forward to reinvent the field

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