The Influence of Managerial Ownership on the Real Gains in Corporate Mergers and Market Revaluation of Merger Partners: Empirical Evidence

Carline, Nicholas F.; Linn, Scott C.; Yadav, Pradeep K.

doi:10.2139/ssrn.302606

Cited by 25 publications

(18 citation statements)

References 37 publications

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“…Board size has a negative significant coefficient indicating that firms with a smaller board size achieve higher Q values. Research by Carline, Linn and Yadav (2002) also claims that board size is inversely related to operating performance in UK firms. Mak and yuanto (2002) examined the relationship between size of the board and firm performance in Singapore and Malaysia.…”

Section: Board Composition and Sizementioning

confidence: 99%

Board Mechanisms and Malaysian Family Companies’ Performance

Amran¹,

Ahmad²

2011

AJAG

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Section: Board Composition and Sizementioning

confidence: 99%

Board Mechanisms and Malaysian Family Companies’ Performance

Amran¹,

Ahmad²

2011

AJAG

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“…Similar to Healy et al (1992), the median of ACFR 3 years before and after acquisition (ACFRpre and ACFRpost) is used. Furthermore, while most studies focus on post-acquisition performance only (Healy et al, 1992;Linn & Switzer, 2001;Loughran & Ritter, 1997;Powell & Stark, 2005;Rahman & Limmack, 2004), some papers also calculate the change in cash flow returns ( ACFR) to examine the improvement in performance (Carline, Linn, & Yadav, 2002;Rahman & Limmack, 2004). ACFR is defined as ACFRpost minus ACFRpre.…”

Section: Variablesmentioning

confidence: 99%

Ownership structure and operating performance of acquiring firms: The case of English-origin countries

Yen

2007

Journal of Economics and Business

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This paper provides empirical evidence on the relation between concentrated ownership and the long term operating performance of acquiring firms. We investigate the performance around 287 takeovers in English-origin countries other than the US by following the classification of La Porta et al. ]. Our principal finding is that the relationship between concentrated ownership and the level and change in operating cash flow returns after takeovers is non-linear. Value creating deals are associated with higher levels of concentration consistent with decreasing agency costs as the dominant shareholder's wealth invested in the acquiring firm increases. We also find, although all acquiring firms are from English-origin countries, that greater investor protection, as measured by the updated anti-director rights index in Djankov et al. [Djankov, S., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2006). The law and economics of self-dealing. Working Paper], has a positive impact on operating performance from acquisitions. We do not find a link between performance and their new anti-self-dealing index.

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“…Synergies may arise in situations where the bidder and target operate in similar industries, a 'focus effect' [43], as in the case of Stelmar and OSG. The hubris and empire building hypothesis predicts that target firm returns should be positive, bidder firm returns should be negative and the combined firm returns should be non-positive; mergers are not wealth-creating events but attempts to build corporate empires serving managerial self-interests.…”

Section: Corporate Takeovers and Shareholder Valuementioning

confidence: 99%