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The effect of reference point prices on mergers and acquisitions
Baker, Malcolm; Pan, Xin; Wurgler, Jeffrey - In: Journal of Financial Economics 106 (2012) 1, pp. 49-71
Prior stock price peaks of targets affect several aspects of merger and acquisition activity. Offer prices are biased toward recent peak prices although they are economically unremarkable. An offer's probability of acceptance jumps discontinuously when it exceeds a peak price. Conversely, bidder...
Persistent link: https://www.econbiz.de/10010593840
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Acquirer-target social ties and merger outcomes
Ishii, Joy; Xuan, Yuhai - In: Journal of Financial Economics 112 (2014) 3, pp. 344-363
compensated for completing mergers with targets that are highly connected to the acquiring firms, that acquisitions are more … likely to take place between two firms that are well connected to each other through social ties, and that such acquisitions …
Persistent link: https://www.econbiz.de/10011039232
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Managerial attitudes and corporate actions
Graham, John R.; Harvey, Campbell R.; Puri, Manju - In: Journal of Financial Economics 109 (2013) 1, pp. 103-121
We administer psychometric tests to senior executives to obtain evidence on their underlying psychological traits and attitudes. We find US CEOs differ significantly from non-US CEOs in terms of their underlying attitudes. In addition, we find that CEOs are significantly more optimistic and...
Persistent link: https://www.econbiz.de/10010665550
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Do analysts matter for governance? Evidence from natural experiments
Chen, Tao; Harford, Jarrad; Lin, Chen - In: Journal of Financial Economics 115 (2015) 2, pp. 383-410
compensation, its management is more likely to make value-destroying acquisitions, and its managers are more likely to engage in …
Persistent link: https://www.econbiz.de/10011189253
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Tournament incentives, firm risk, and corporate policies
Kini, Omesh; Williams, Ryan - In: Journal of Financial Economics 103 (2012) 2, pp. 350-376
This paper tests the proposition that higher tournament incentives will result in greater risk-taking by senior managers in order to increase their chance of promotion to the rank of CEO. Measuring tournament incentives as the pay gap between the CEO and the next layer of senior managers, we...
Persistent link: https://www.econbiz.de/10010571652
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Ownership structure and financial constraints: Evidence from a structural estimation
Lin, Chen; Ma, Yue; Xuan, Yuhai - In: Journal of Financial Economics 102 (2011) 2, pp. 416-431
This article examines the impact of the divergence between corporate insiders' control rights and cash-flow rights on firms' external finance constraints via generalized method of moments estimation of an investment Euler equation. Using a large sample of U.S. firms during the 1994–2002...
Persistent link: https://www.econbiz.de/10010576089
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The role of the media in corporate governance: Do the media influence managers' capital allocation decisions?
Liu, Baixiao; McConnell, John J. - In: Journal of Financial Economics 110 (2013) 1, pp. 1-17
Using 636 large acquisition attempts that are accompanied by a negative stock price reaction at their announcement (“value-reducing acquisition attempts”) from 1990 to 2010, we find that, in deciding whether to abandon a value-reducing acquisition attempt, managers' sensitivity to the firm's...
Persistent link: https://www.econbiz.de/10011039215
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The impact of investor protection law on corporate policy and performance: Evidence from the blue sky laws
Agrawal, Ashwini K. - In: Journal of Financial Economics 107 (2013) 2, pp. 417-435
Recent studies have debated the impact of investor protection law on corporate behavior and value. I exploit the staggered passage of state securities fraud statutes (“blue sky laws”) in the United States to estimate the causal effects of investor protection law on firm financing decisions...
Persistent link: https://www.econbiz.de/10011039263
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Acquisitions driven by stock overvaluation: Are they good deals?
Fu, Fangjian; Lin, Leming; Officer, Micah S. - In: Journal of Financial Economics 109 (2013) 1, pp. 24-39
, overvalued acquirers significantly overpay for their targets. These acquisitions do not, in turn, lead to synergy gains. Moreover …, these acquisitions seem to be concentrated among acquirers with the largest governance problems. CEO compensation, not … shareholder value creation, appears to be the main motive behind acquisitions by overvalued acquirers. …
Persistent link: https://www.econbiz.de/10010665563
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Are busy boards detrimental?
Field, Laura; Lowry, Michelle; Mkrtchyan, Anahit - In: Journal of Financial Economics 109 (2013) 1, pp. 63-82
Busy directors have been widely criticized as being ineffective. However, we hypothesize that busy directors offer advantages for many firms. While busy directors may be less effective monitors, their experience and contacts arguably make them excellent advisors. Among IPO firms, which have...
Persistent link: https://www.econbiz.de/10010665549