Board connections and M&A transactions

• 成果类型: Article
• 署名作者: Cai, Ye; Sevilir, Merih
• 署名单位: Indiana University System; Indiana University Bloomington; IU Kelley School of Business; Santa Clara University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.05.017
• 发表日期: 2012
• 页码: 327-349
• 关键词: Mergers and acquisitions; Acquirer returns; Board connections

摘要

We examine M&A transactions between firms with current board connections and find that acquirers obtain higher announcement returns in transactions with a first-degree connection where the acquirer and the target share a common director. Acquirer returns are also higher in transactions with a second-degree connection where one acquirer director and one target director serve on the same third board. Our results suggest that first-degree connections benefit acquirers with lower takeover premiums while second-degree connections benefit acquirers with greater value creation. Overall, we provide new evidence that board connectedness plays important roles in corporate investments and leads to greater value creation. (C) 2011 Elsevier B.V. All rights reserved.