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Management practises and M&A success

Delis, Manthos D; Iosifidi, Maria; Kazakis, Pantelis; Ongena, Steven; Tsionas, Mike G (2022). Management practises and M&A success. Journal of Banking and Finance, 134:106355.

Abstract

We study whether management practices determine merger and acquisition (M&A) success. We model management as an unobserved (latent) variable in a standard microeconomic model of the firm and derive firm-year management estimates. We validate these estimates against benchmark survey data on management practices and by using Monte Carlo simulation. We show that our measure is among the most important determinants of value creation in M&A deals, substantially increasing the predictive power of models that explain cumulative abnormal returns. Thus, we offer a measure of management practices that identifies the best-performing M&As. Our results are robust to the inclusion of acquirer fixed effects and many control variables, and to several other sensitivity tests. We identify the Q-theory as the key mechanism driving our results.

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Finance
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Finance
Social Sciences & Humanities > Economics and Econometrics
Scope:Discipline-based scholarship (basic research)
Language:English
Date:January 2022
Deposited On:25 Aug 2022 07:21
Last Modified:28 Oct 2024 02:35
Publisher:Elsevier
ISSN:0378-4266
OA Status:Hybrid
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.1016/j.jbankfin.2021.106355
Related URLs:https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3743980 (Organisation)
Other Identification Number:merlin-id:21618
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  • Licence: Creative Commons: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)

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