Is Social Capital Valuable? Evidence from Mergers and Acquisitions
We use novel U.S. county social capital data from the Social Capital Project and show that acquirers located in a high social capital county experience higher announcement returns. The effect is more pronounced when agency problems in the acquirer are more severe. In addition, we find evidence that higher social capital is associated with higher synergies, better long-term performance, and shorter deal duration. Overall, the results are consistent with the shareholder value maximization view that social capital mitigates opportunistic and self-serving decisions by acquirer managers which lead to acquisitions that benefit shareholders in the short-term and long-term
Year of publication: |
2022
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Authors: | Nguyen, Giang ; Suchard, Jo-Ann ; Wang, Yuelin |
Publisher: |
[S.l.] : SSRN |
Saved in:
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