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The Impact of Horizontal Mergers on Rivals: Gains to Being Left Outside a Merger

Clougherty, Joseph A.; Duso, Tomaso - C.E.P.R. Discussion Papers - 2008

It is commonly perceived that firms do not want to be outsiders to a merger between competitor firms. We instead argue that it is beneficial to be a non-merging rival firm to a large horizontal merger. Using a sample of mergers with expert-identification of relevant rivals and the event-study...

Persistent link: https://www.econbiz.de/10005123810

Bottom-Up Corporate Governance

Landier, Augustin; Sraer, David; Thesmar, David - C.E.P.R. Discussion Papers - 2006

In many instances, 'independently-minded' top-ranking executives can impose strong discipline on their CEO, even though they are formally under his authority. This paper argues that the use of such a disciplining mechanism is a key feature of good corporate governance. We provide robust...

Persistent link: https://www.econbiz.de/10005136453

Industry Concentration and Welfare - On the Use of Stock Market Evidence from Horizontal Mergers

Fridolfsson, Sven-Olof; Stennek, Johan - C.E.P.R. Discussion Papers - 2006

There is diverging empirical evidence on the competitive effects of horizontal mergers: consumer prices (and thus presumably competitors' profits) often rise while competitors' share prices fall. Our model of endogenous mergers provides a possible reconciliation. It is demonstrated that...

Persistent link: https://www.econbiz.de/10005497962

Mergers as Auctions

Ivaldi, Marc; Motis, Jrissy - C.E.P.R. Discussion Papers - 2007

Most empirical studies that evaluate motives and gains in M&A conclude that acquirers at best do not lose from the deal while targets obtain positive gains. With a database containing merging firms’ characteristics and final bids, we propose a structural approach to infer acquirers’ gains...

Persistent link: https://www.econbiz.de/10005656211

Tips and Tells from Managers: How Analysts and the Market Read Between the Lines of Conference Calls

Druz, Marina; Wagner, Alexander F; Zeckhauser, Richard - C.E.P.R. Discussion Papers - 2015

Stock prices react significantly to the tone (negativity of words) managers use on earnings conference calls. This reaction reflects reasonably rational use of information. “Tone surprise” -- the residual when negativity in managerial tone is regressed on the firm’s recent economic...

Persistent link: https://www.econbiz.de/10011145406

Distressed Acquisitions

Meier, Jean-Marie A.; Servaes, Henri - C.E.P.R. Discussion Papers - 2014

Firms that buy distressed and bankrupt companies or some of these companies’ assets earn excess returns that are at least 1.6 percentage points higher than when they make regular acquisitions. These returns come at the expense of the target firm’s shareholders, while overall wealth gains are...

Persistent link: https://www.econbiz.de/10011083439

Strategic News Releases in Equity Vesting Months

Edmans, Alex; Goncalves-Pinto, Luis; Wang, Yanbo; Xu, Moqi - C.E.P.R. Discussion Papers - 2014

We show that CEOs strategically time corporate news releases to coincide with months in which their equity vests. These vesting months are determined by equity grants made several years prior, and thus unlikely driven by the current information environment. CEOs reallocate news into vesting...

Persistent link: https://www.econbiz.de/10011084526

Feedback Effects and the Limits to Arbitrage

Edmans, Alex; Goldstein, Itay; Jiang, Wei - C.E.P.R. Discussion Papers - 2014

This paper identifies a limit to arbitrage that arises because firm value is endogenous to the exploitation of arbitrage. Trading on private information reveals this information to managers and improves their real decisions, enhancing fundamental value. While this feedback effect increases the...

Persistent link: https://www.econbiz.de/10011084724

Performance Pay, CEO Dismissal, and the Dual Role of Takeovers

Burkart, Mike; Raff, Konrad - C.E.P.R. Discussion Papers - 2012

We propose that an active takeover market provides incentives by offering acquisition opportunities to successful … performance-based pay are non-monotonic in the intensity of the takeover threat. In firms with weak boards, turnover (performance …-based pay) increases (decreases) with the intensity of the takeover threat. When choosing its acquisition policy and the quality …

Persistent link: https://www.econbiz.de/10011083799

Executive Compensation: A Modern Primer

Edmans, Alex; Gabaix, Xavier - C.E.P.R. Discussion Papers - 2015

This article studies traditional and modern theories of executive compensation, bringing them together under a unifying framework. We analyze assignment models of the level of pay, and static and dynamic moral hazard models of incentives, and compare their predictions to empirical findings. We...

Persistent link: https://www.econbiz.de/10011272716

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