Shareholder investment horizons and the market for corporate control

• 成果类型: Article
• 署名作者: Gaspar, JM; Massa, M; Matos, P
• 署名单位: INSEAD Business School; ESSEC Business School
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2004.10.002
• 发表日期: 2005
• 页码: 135-165
• 关键词: investment horizon; Mergers and Acquisitions; shareholder heterogeneity; institutional investors; short termism

摘要

This paper investigates how the investment horizon of a firm's institutional shareholders impacts the market for corporate control. We find that target firms with short-term shareholders are more likely to receive an acquisition bid but get lower premiums. This effect is robust and economically significant: Targets whose shareholders hold their stocks for less four months, one standard deviation away from the average holding period of 15 months, exhibit a lower premium by 3%. In addition, we find that bidder firm with short-term shareholders experience significantly worse abnormal returns around the merger announcement, as well as higher long-run under-performance. These findings Suggest that firms held by short-term investors have a weaker bargaining position in acquisitions. Weaker monitoring from short-term shareholders could allow managers to proceed with value-reducing acquisitions or to bargain for personal benefits (e.g., job security, empire building) at the expense of shareholder returns. (c) 2004 Elsevier B.V. All rights reserved.