Business Commons^™

Shifting Perspectives: How Scrutiny Shapes The Relationship Between Ceo Gender And Acquisition Activity, Daniel L. Gamache, Cynthia E. Devers, Felice B. Klein, Timothy Hannigan

Management Faculty Publications and Presentations

Research Summary: Several upper echelons studies have found that firms led by female executives are less likely to engage in risky endeavors than those led by male top executives. We argue that conceptualizing female CEOs as universally conservative decision-makers may paint too simplistic a picture and that the impact of CEO gender on strategic decision-making may vary significantly depending on the given situation CEOs are experiencing. We integrate executive job demands and gender research to propose that scrutiny will exhibit differential effects on female and male CEOs' acquisition activity. We show that in high-scrutiny contexts, the difference between male and …

Leadership Behaviors, Practices, And Sytles In Mergers And Acquisitions In The U.S. Technology-Based Organizations: A Qualitative Study, Susan E. Glover

Human Resource Development Theses and Dissertations

Leaders guide and shape the success of mergers and acquisitions (M&A) to meet an organization’s goals and objectives. In this study, I explored the role of leadership during M&A and the effect of different leadership behaviors, practices, and styles (BPS) on different organizational cultures during M&A. This study explored the contribution of leadership BPS on M&A outcomes within an organization with a robust and innovative culture. I focused on the human capital investment strategies of M&A integration concerning different leadership BPS utilized to improve the success rate of M&A goals and objectives. I concentrated on technology-based organizations because they are …

Public Target Selection And Family Firms, Ezgi H. Ottolenghi

The Journal of Entrepreneurial Finance

We examine the relation between ownership structure and M&A target selection when family firms pursue public firm acquisitions. We find that family firm acquirers select targets that have lower Tobin’s Q relative to non-family acquirers. Our results suggest that family firms choose to acquire less glamorous targets against which they can better negotiate. The market reacts more positively to these family firm acquisitions at announcement and out to one year. It is family firm target selection skill along with negotiation skill that leads to the favorable market reception.

Effects Of Corporate Cultural Distance On Private Company M&A Outcomes, Court Carruthers

Theses and Dissertations

Despite nearly $5 trillion of annual global merger and acquisition (M&A) activity, the degree of shareholder value created by M&A remains a topic of debate. The historical view is that M&A does not increase value for acquiring firms, however recent public company financial research suggests that returns are highly variable, rather than uniformly negative. Cultural differences between acquiring and acquired companies, or corporate cultural distance (CCD), are noted as a potential cause of this variability, however, public company findings remain inconclusive. Although private equity (PE) is responsible for approximately 20% of annual M&A transaction value, nearly all prior research is …

Investors' Reactions To Alliance-Engendered Acquisition Ambiguity: Evidence From Us Technology Deals, Panos Desyllas, Martin C. Goossen, Corey C. Phelps

Management Faculty Publications

We study how, when target firms are engaged in strategic alliances, the ambiguity surrounding an acquisition's anticipated synergies influences investors' reactions to announcements of acquisitions. Drawing on behavioural finance research and the resource redeployment literature, we predict that investors' limited access to the information encoded in the target firms' alliances and the uncertainty around the re-deployability of their embedded resources generate a negative relationship between the number of target alliances and investors' reactions. We also hypothesize that this negative effect is exacerbated when the alliances involve foreign alliance partners but is attenuated when acquirers are experienced in acquiring targets with …

The Market For Corporate Criminals, Andrew K. Jennings

Faculty Articles

This Article identifies problems and opportunities at the intersection of mergers and acquisitions (M&A) and corporate crime and compliance. In M&A, criminal successor liability is of particular importance, because it is quantitatively less predictable and qualitatively more threatening to buyers than successor liability in tort or contract. Private successor liability requires a buyer to bear bounded economic costs, which can in turn be reallocated to sellers via the contracting process. Criminal successor liability, however, threatens a buyer with non-indemnifiable and potentially ruinous punishment for another firm’s wrongful acts.

This threat may inhibit the marketability of businesses that have criminal exposure, …

Gea Farm Technologies: Building Core Competencies Through Internal And External Growth, Jan-Philipp Büchler Prof Dr, Axel Faix Prof Dr, Gregor Brüggelambert Dr, Anna Weiland

Case Studies

GEA Farm Technologies is a mid-sized world market leader of mechanical equipment and service solutions for milk production and livestock farming. The so-called hidden champion developed a set of capabilities and core competencies to innovate the industry’s established business model through a two-fold strategy balancing internal and external growth. The case study invites students to explore the benefits and limits of this business model innovation and requires them to investigate further strategic options for growth.

The Relationship Between Political Contributions And Federal Earmarks And The Impact Of State-Owned Enterprises On U.S. Competition, Tahsin I. Huq

University of New Orleans Theses and Dissertations

With the reintroduction of hard earmarks in the U.S., it is essential to understand the factors that drive earmark receipt. Legislative earmarks have historically represented a significant source of revenue for several firms. We examine the relationship between political expenditure, federal earmarks, and subsequent firm performance. Using a sample of earmarks from 2008-2010 Appropriations bills, we demonstrate that Political Action Committee (PAC) contributions by firms to Senators and Representatives strongly predict both the size and number of earmarks directed to these companies. We also show that PAC contributions to a member of Congress increase the probability that a politician writes …

Exploration Of Post-Merger Integration Meetings, Through A Qualitative Study Of Individuals’ Perceptions, Ruben Cintron

USF Tampa Graduate Theses and Dissertations

In 2020, the United Sates mergers and acquisitions (M&As) had a total value of $1.2 trillion. Organizations engage in M&As for a variety of reasons, such as to gain economies of scale and scope, obtain technologies, enter new markets, or gain competitive advantage by eliminating competitors or combining forces. However, studies indicate that less than half achieve their stated strategic and financial goals. Two factors cited within the M&A literature that contribute to the failure rate are cultural clashes and post-merger integration activities. This three-paper dissertation explores the influence organizational cultures and post-merger integration activity (post-merger meetings) may have on …

A Nexus Between Mergers & Acquisitions And Financial Performance Of Firms: A Study Of Industrial Sector Of Pakistan, Fiza Quareshi, Mukhtiar Ali, Salar Hussain

University of South Florida (USF) M3 Publishing

Mergers and Acquisitions (M&As) have gained considerable interest in the last few decades and the purpose behind these events is to increase revenues, gain market share, achieve competitive edge and aimed to diversify the risk. This study aims to investigate the role of mergers and acquisitions on the financial performance of firms in the industrial sector of Pakistan. Financial Performance is measured on the basis of the stock market performance of the firms, which has been measured using the event study methodology as this is one of the recognized techniques in the conditions of M&As. Stock market performance is measured …

Learning In Serial Mergers: Evidence From A Global Sample, Vivek K. Pandey, Ninon K. Sutton, Tanja Steigner

Accounting, Finance & Business Law Faculty Publications and Presentations

Do frequent acquirers learn from their experience in serial mergers? A recent stream of literature has proposed that the generally observed declining investor response (CARs) to successive acquisitions by frequent acquirers may be evidence of learning, rather than the result of commonly attributed causes such as managerial hubris or empire-building. We examine the learning hypothesis on a global scale, using a sample of 13,326 publicly listed acquiring firms representing 72 nations conducting 27,305 acquisitions over the period 1984 through 2014. Our results provide evidence of acquirer learning on a global scale in the valuation of private targets. In contrast, we …

Can Mergers And Acquisitions Internalize Positive Externalities In Funding Innovation?, Leo Li, Mark Liu

Institute for the Study of Free Enterprise Working Papers

Fundamental innovation usually involves huge upfront costs, but the benefits are spread across various sectors of the economy. Given the large costs and limited appropriability of the benefits associated with the innovation, individual firms underinvest in these innovations relative to the socially optimal level. We find that mergers and acquisitions (M&As) can internalize the positive externalities by merging firms from both the user industries and the producer industries of an innovation. Using the US patent citation dataset, we define the user and producer relationship between each pair of industries and between each pair of industry and technological class. We then …

Essays On The Roles Of Employee Representatives On The Board In Corporate Policy-Making, Amirhossein Fard

Theses and Dissertations

This dissertation consists of four chapters, investigating the roles of employee representatives on the board in corporate policies in a sample of European countries. I examine the role of employee representatives on the board in firms’ merger and acquisition intensity and performance. In addition, I study the value-creating roles of these directors. In particular, I study the effects of employee representative directors on the firms’ pay gap between the CEO and average employees. In chapter Ι, I describe the background on the idea behind the presence of employee representatives and how the laws mandating this presence have changed in Europe. …

Three Essays On Ceo Characteristics And Corporate Decisions, Trung Nguyen

Theses and Dissertations in Business Administration

Recent studies have stressed the importance of managerial fixed effects on firm investment decisions. Following this stream of research, this dissertation empirically investigates the potential effects of two major Chief Executive Officer (CEO) characteristics, i.e. risk preferences and potential mobility, on corporate decisions such as merger and acquisition (M&A) and corporate social responsibility (CSR) investments.

Essay 1 examines whether the variation of M&A stock returns around the 2008 financial crisis is associated with shareholders’ increased loss aversion as a result of undergoing financial losses. The results show that acquisitions carried out by CEOs with risk-averse inducing compensation (inside debt) before …

What Drives Merger Waves? A Study Of The Seven Historical Merger Waves In The U.S., Katherine Ching

Scripps Senior Theses

Historically, merger and acquisition (or M&A) activity has occurred in cyclical patterns, forming what are known as “merger waves.” To date, there have been a total of seven waves. Though it is widely acknowledged that merger waves exist, there is no consensus on what drives these waves. Through both qualitative and quantitative analysis, this paper aims to determine the causes of merger waves and looks at those causes through two different lenses: the neoclassical view, which states that economic shocks cause merger waves, and the behavioral view, which states that increases in merger activity are due to managerial behavior and …

Anatomy Of An Acquisition: The Challenges Of Selling A Privately Held Electronics Manufacturing Company, George Dierberger, Marc Mcintosh, Lori L. Lohman, Phyllis Kapetanakis

Faculty Authored Articles

Sweeny Electronics is a family-owned S Corporation based in St. Paul, Minnesota. The company was started in 1946 by a returning army veteran, Mike Sweeney, and focused on the heating, air quality and cooling markets. The company has survived numerous recessions, market consolidation, and manufacturing challenges in China, and currently is run by the third generation Sweeney family. The current owner and CEO, George Sweeney, is the grandson of the founder and is approaching retirement age. The board of directors has seven members: George Sweeney, his wife Jane and five members of the business community. Under the direction of the …

Predictive Power? Textual Analysis In Mergers & Acquisitions, Philip E. Morgan

Marriott Student Review

Modern corporations utilize mergers and acquisitions as strategies to develop shareholder value today more than ever before, yet the need for understanding firms’ rationale and strategy is critical in predicting post-merger stock performance for all investors. I apply the interpretive power of textual analysis and regression to a corpus of SEC mergers and acquisitions public company filings between 1994-2017. Not only do I challenge the statistically significant correlation between word content and post-transaction abnormal stock returns, but I also characterize the effects of time segments, transaction size, and industry variation across time. As a final application, I consider sentiment analysis …

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Marriott Student Review

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Acquiring Organizational Capital, Peixin Li, Frank Weikai Li, Baolian Wang, Zilong Zhang

Research Collection Lee Kong Chian School Of Business

Organizational capital is the accumulation and use of private information to enhance economic efficiency for a firm. Theory has argued that organizational capital is typically embodied in employees and the organizational structure, and is hard to transfer across organizations. In this paper, we study whether organizational capital is transferable across firms via mergers. The evidence shows that acquirers gain more from acquiring firms with higher organizational capital and acquirers are also willing to pay a higher premium for higher organizational capital targets. The evidence suggests that acquiring higher organizational capital targets creates synergies which are shared between acquirers and targets.

Consolidation And Innovation In The Pharmaceutical Industry: The Role Of Mergers And Acquisitions In The Current Innovation Ecosystem, Joanna Shepherd

Faculty Articles

Recent changes in the pharmaceutical industry have spurred an unprecedented wave of mergers and acquisitions. Some researchers and agencies have questioned whether pharmaceutical consolidation could impede drug innovation. However, as I explain in this Article, these concerns are largely based on an outdated understanding of the drug innovation ecosystem. Whereas a few decades ago almost all drug discovery took place inside traditional pharmaceutical companies, today most drug innovation is externally-sourced from biotech companies and smaller firms. Internal R&D is no longer the primary source, or even an important source, of drug innovation. As a result, analyses that focus on the …

Examining Outcomes Of Marketing Actions From Customer, Investor, And Operational Perspectives, Leon Gim Lim

Dissertations and Theses Collection (Open Access)

This dissertation examines the impact of three distinct marketing actions from three different perspectives, i.e., customer, investor, and operational. Specifically, the first essay examines investors’ evaluation of firms’ price-increase preannouncements, thereby responding to recent calls for exploring investors’ evaluation of a firm’s pricing actions which have been predominantly examined from consumers’ perspective. The second essay adopts an operations lens to present the first empirical examination about the impact of customer satisfaction on the future costs of selling and producing for a firm. The essay, therefore, is of direct importance to CEOs as they consider costs as their top priority. In …

Three Essays On Corporate Finance, Mengyao Kang

Dissertations and Theses Collection (Open Access)

This dissertation has three essays in corporate finance. In the first chapter, We investigate whether a CEO’s experience with mergers matter when her firm becomes a takeover target? We find that shareholders receive higher premiums when their CEO has experience. The evidence suggests this is due to learning rather than innate skills or selection. Consistent with superior negotiation of salient features of takeover offers, experienced target CEOs obtain either safer cash payments or higher premiums as the fraction of cash in the offer decreases. These benefits do not come at the cost of other contractual concessions or inefficiencies in takeover …

Essays On Emerging Multinational Enterprises' Acquisitions In Developed Economies, Faisal R. Harahap

FIU Electronic Theses and Dissertations

This dissertation investigates emerging multinational enterprises (EMNEs)’s acquisitions of firms in developed economies (DE) through three distinctive but interrelated essays. Despite costs EMNEs must offset from the obvious cultural distance (CD) they encounter with limited exploitable advantages, EMNEs have continued to aggressively acquire firms in DE, suggesting there are ways for the EMNEs to effectively overcome CD. In Essay 1, using insights from the symbolic interaction paradigm in sociology, I developed the Dynamic Socio-Cultural Model (DSCM), to uncover the general process of cultural creation and change. At the core of the DSCM is the process of collective learning and adaptive …

Ceo Political Ideology And Mergers And Acquisitions Decisions, Ahmed M. Elnahas, Kim Dongnyoung

EKU Faculty and Staff Scholarship

We examine the relation between CEOs political ideology and their firms' investment decisions, particularly their M&A decisions. Employing individual financial contributions data for the period from 1993 to 2006, we find that firm's investment decisions vary with CEO's political ideology. Our evidence indicates that Republican CEOs are less likely to engage in M&A activities. When they do undertake acquisitions, they are more likely to use cash as the method of payment, and their targets are more likely to be public firms and to be from the same industry. Further, Republican CEOs tend to avoid high information asymmetry acquisitions that involve …

Taxation, Competitiveness, And Inversions: A Response To Kleinbard, Michael S. Knoll

All Faculty Scholarship

In this report, I argue that the inversion situation is more nuanced, complex, and ambiguous than Edward D. Kleinbard acknowledges, and I challenge Kleinbard’s claim that U.S. multinationals are on a tax par with their foreign competitors.

Perfectly Frank: A Reflection On Quality Lawyering In Honor Of R. Franklin Balotti, Leo E. Strine Jr., James J. Hanks Jr., John F. Olson, A. Gilchrist Sparks, E. Norman Veasey, Gregory P. Williams

All Faculty Scholarship

This essay honoring the late R. Franklin Balotti focuses upon certain of the key attributes necessary to practice business law effectively and ethically. Among these attributes are a strong work ethic, the integrity to stand behind your own advice and candidly admit when things do not go according to plan, empathy for how others will view your client’s actions and the ability to communicate that perception to your client, the confidence to change the pace of a transaction when a slow down or time out is warranted, and the ability to have some fun and laugh (even at yourself). Perhaps …

Merger And Acquisition Financial Reporting Outcomes: An Examination Of Non-Audit Fees And The Impact On Auditor Independence, Jimmy Carmenate

Doctor of Business Administration Dissertations

For over 40 years, the issue of auditors providing both auditing and non-audit services (NAS) to their audit-clients continues to be at the forefront of concerns to regulators, investors, and academics. The literature primarily provides two competing effects of NAS on financial reporting quality. The first being the compromise on auditor independence and the other on the benefits attained from knowledge spillover. Though these competing effects have been studied in various contexts, there has been little to no research on the association between NAS and the outcomes from mergers and acquisitions (M&A) to infer whether NAS lessens the threat to …

When The Target May Know Better: Effects Of Experience And Information Asymmetries On Value From Mergers And Acquisitions, Ilya R. P. Cuypers, Youtha Cuypers, Xavier Martin

Research Collection Lee Kong Chian School Of Business

Extending research on the effect of experience on acquisition outcomes, we examine how the differential in previous M&A experience between the target and the acquirer affects the value they, respectively, obtain when the acquirer takes over the target. Drawing on literature about organizational learning, negotiation, and information economics, we theorize that the party with greater experience will be able to obtain more value. Furthermore, we theorize that the effect of differential M&A experience on value obtained is contingent on the level of information asymmetry the acquirer faces with respect to the target, specifically as a function of the target's product-market …

Cross-Border M&A: Challenges And Opportunities In Global Business Environment [Guest Editors' Introduction], Rosa Caizza, Katsuhiko Shimizu, Toru Yoshikawa

Research Collection Lee Kong Chian School of Business

Under a rapidly changing and globalizing environment, mergers and acquisitions (M&As) have become one of the most important strategic initiatives. In this context, cross-border M&As provide various opportunities and benefits such as expeditious entry into new markets by gaining local knowledge, supplier networks, government relationships, and customers embedded in the target firm.

Managers' Network Change And Their Promotability During A Merger, Wookje Sung

Theses and Dissertations--Management

I investigate whether cross-functional or cross-organizational networking following a large corporate merger and acquisition improves managers’ career outcomes. Previous research on networks and career success has focused on stable organizational environments, finding that large, open networks with many structural holes are most advantageous because of superior information benefits and control power, while closed networks provide redundant information that is unhelpful career-wise. However, I suggest that while dense, closed networks formed within knowledge (functional) or identity (legacy organization) boundaries might be detrimental to executives’ future promotability, closed networks are helpful if they are created across those boundaries. These ties help to …