High-Reputation Firms and Their Differential Acquisition Behaviors

• 成果类型: Article
• 署名作者: Haleblian, Jerayr J.; Pfarrer, Michael D.; Kiley, Jason T.
• 署名单位: University of California System; University of California Riverside; University System of Georgia; University of Georgia; Oklahoma State University System; Oklahoma State University - Stillwater
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2645
• 发表日期: 2017
• 页码: 2237-2254
• 关键词: firm reputation; social evaluations; Mergers and Acquisitions; panel data; event study

摘要

Research summary: Emerging reputation research suggests that high-reputation firms will act to maintain their reputations in the face of high expectations. Yet, this research remains unclear on how high-reputation firms do so. We advance this research by exploring three questions related to high-reputation firms' differential acquisition behaviors: Do high-reputation firms make more acquisitions than similar firms without this distinction? What kind of acquisitions do they make? How do investors react to high-reputation firms' differential acquisition behaviors? We find that high-reputation firms make more acquisitions and more unrelated acquisitions than other firms. Yet, we also find that investors bid down high-reputation firms' stock more than other firms' in response to acquisition announcements, suggesting that investors are skeptical of how high-reputation firms maintain their reputations. Managerial summary: We know that high-reputation firms wish to maintain their elite standing in the face of high-market expectations, but we know little about how they do so. We explore this puzzle by investigating how reputation maintenance influences high-reputation firms' acquisition behaviors. We classify high-reputation firms are those firms that make Fortune's Most Admired annual list, and we find that high-reputation firms make more acquisitions and more unrelated ones than other firms. Surprisingly, we also find that the market tends to react negatively to these acquisitions. Thus, managers may want to reconsider their strategy of making acquisitions as a means to maintain their firms' high reputations. Copyright (c) 2017 John Wiley & Sons, Ltd.