Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2022.2080731
Do the ties of corporate executives and directors affect short-term M&A return growth? Evidence from China
Linyu Wang
Zhangzhe Shen
Ardjouman Diabate
Liying Yu
Sažetak
This article investigates whether the social ties of corporate executives
and directors affect short-term return growth during the
announcement period of mergers and acquisitions (M&A). We
consider both the educational background and employment history
of the corporate executives and directors to measure social
ties. Specifically, a text analysis algorithm is employed to match
employment history. Then, we choose the cumulative abnormal
returns to measure the short-term return growth. Using a sample
of 157M&A deals in the Chinese market from 2000 to 2017, we
find that acquirer-target social ties have a significantly negative
effect on post-merger performance. However, the negative effect
of social ties on post-merger firms’ short-term returns will
decrease (become less negative) when the firms have good corporate
governance mechanisms. Moreover, social ties could also
affect the retention of the target firms. The executives and directors
are more likely to remain in the post-acquisition firm when
the social ties are high. Our results have important implications
for policymakers and corporate governance.
Ključne riječi
Social ties of executives and directors; mergers and acquisitions (M&A); shortterm return growth; quality of corporate governance; Chinese Public Companies (CPCs)
Hrčak ID:
304278
URI
Datum izdavanja:
31.3.2023.
Posjeta: 218 *