2004
DOI: 10.1002/smj.404
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Do early birds get the returns? An empirical investigation of early‐mover advantages in acquisitions

Abstract: We explore whether pioneering advantages exist for early-mover acquirers in industry acquisition waves by examining both combined (target and acquirer) and acquirer stock returns. Combined abnormal returns are higher for acquisitions that occur at the beginning of acquisition waves. However, for acquirers' returns, only strategic pioneers-those acting in manners consistent with having superior information-capture significant advantages. Specifically, early-mover acquirers who realize superior stock returns are… Show more

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Cited by 201 publications
(182 citation statements)
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References 126 publications
(173 reference statements)
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“…Thus, we calculated slack resources as the sum of cash flow from a firm's operating, financing, and investing activities. To control for firm size, we scaled slack resources by total assets (Carow et al 2004).…”
Section: Methodsmentioning
confidence: 99%
“…Thus, we calculated slack resources as the sum of cash flow from a firm's operating, financing, and investing activities. To control for firm size, we scaled slack resources by total assets (Carow et al 2004).…”
Section: Methodsmentioning
confidence: 99%
“…In turn, the literature on acquisitions and alliances shows that external sourcing facilitates technological and commercial renewal by exposing the firm to new technological domains, product environments, and geographic markets (Carow et al 2004, Krishnan et al 2004. Empirical studies show that managers often search for targets or allies with strong capabilities that complement the acquirer's weaknesses, with a view to redeploying the stronger capabilities from the target (Capron 1999, Capron et al 1998 or use the ally's strength (Dussauge et al 2000).…”
Section: Internal Development Vs External Sourcing: Contingency Factorsmentioning
confidence: 99%
“…Second, according to the superior information thesis, CEOs undertake acquisitions when they believe that they hold asymmetric or superior information that allows them to recognize prospective acquisition opportunities that others cannot or do not see . This perspective suggests that CEOs acquire because they believe that their superior information will allow them to seize value from combining firms before their competitors recognize the oppor-tunity (Carow, Heron, & Saxton, 2004;Myers & Majluf, 1984).…”
Section: Ceos' Post-acquisition Announcement Equity-based Holdings Chmentioning
confidence: 99%