Contingent considerations (“earnouts”) in acquisition agreements provide sellers with future payments conditional on meeting certain conditions. Prior research provides evidence that acquiring firms use earnouts to minimize agency costs associated with acquisitions. Using earnout fair value...

We use the unique setting of Malaysian mergers and acquisitions (M&A) activity to test the effect of market-wide investor inattention when managers are attentive. During Ramadan, mainly Muslim investors are likely to be distracted while mainly non-Muslim managers are likely to be attentive and...

We examine the role of cultural heritage in shaping U.S. CEOs' attitudes toward uncertainty, in the context of their corporate acquisition decisions. We find that CEOs with a more uncertainty-avoiding cultural heritage are less likely to engage in acquisitions. Conditional on making an...

We find that when an acquirer is headquartered in a high social capital state in the US, it has a higher cumulative abnormal return (CAR) around an acquisition announcement. A one standard deviation increase in social capital is associated with a 3.63% increase in the standard deviation of the...

Contingent considerations (earnouts) in acquisition agreements provide sellers with future payments conditional on meeting certain conditions. Prior research provides evidence that acquiring firms use earnouts to minimize agency costs associated with acquisitions. Using earnout fair value...

This article examines the presence of the reference price effect in mergers and acquisitions in Russia, which can act as a distortion in investor perception of the influence a deal has on a company. In this study we use the Russian market as a laboratory for the investigation of behavioral...

Despite the mounting evidence that stock misvaluation affects takeover characteristics and outcomes at the deal level, there remains a prolonged debate over whether mispricing drives aggregate industry-level merger activity. We depart from the extant literature and investigate whether stock...

We study the role of financial advisors in M&A for different advisor engagement constellations. We observe positive effects of both target and acquirer advisors on deal completion and prices. The unexpected positive price effect of acquirer advisors is further supported by evidence for higher...

Using merger documents filed with the SEC from 1994 to 2018, we show that being selected by investment banks as “comparable peers” are more than twice as likely to become a target themselves in the future compared to control firms matched for industry and size. They also experience an...

The current study investigates the usage of virtuous language in the management discussion and analysis (MD&A) section of SEC filings (10-K Form) and the prognostic power of such language for takeover performance. The sample under study, obtained from Bloomberg, is comprised of a large number of...