When the target may know better: Effects of experience and information asymmetries on value from mergers and acquisitions

Cuypers, Ilya; Cuypers, Youtha; Martín, Xavier

doi:10.1002/smj.2502

Cited by 163 publications

(108 citation statements)

References 85 publications

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“…Given this, we refer to the sum of the positive or negative benefits that accrue to all partners as total value created in the partnership (see also Cuypers et al, 2017;Kumar, 2008). In scale alliances, total value created results from the total cost reductions the partnership achieves.…”

Section: Background: Value In Public Organizations and Decision-makingmentioning

confidence: 99%

“…Total value created and extra value appropriated. We follow and adapt an approach that has been used fruitfully to study value creation and appropriation in corporate acquisitions and alliances (Cuypers et al, 2017;Kumar, 2008Kumar, , 2010Seth, Song, & Pettit, 2000, 2002. The core idea is that if multiple organizations engage in a joint endeavor toward a common goal, the sum total of the change in a goal-relevant outcome across the partners represents the combined (total) value effect within the endeavor; furthermore, the respective change observed at each partner indicates the value obtained or appropriated by them (for a recent application see Cuypers et al, 2017).…”

Section: Dependent Variablesmentioning

confidence: 99%

“…The identification of the associations we theorize is challenging, not least because there is no way to determine the complete antecedents of variation in politics and procedural rationality, and even of partnership formation. Furthermore, our dependent variables are only observable for organizations that are in a partnership, so we cannot implement matching methods and have to focus on variation (Cuypers et al, 2017;Seth et al, 2000Seth et al, , 2002.…”

Section: Analysis Identification Approach and Limitations On Infementioning

confidence: 99%

“…However, aside from value creation, partnerships (like other governance choices) raise issues of value appropriation (Cuypers, Cuypers, & Martin, 2017;Lavie, 2007). We know relatively less about who gains from the value that is jointly created, especially when two public organizations partner.…”

mentioning

confidence: 99%

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Fishing in troubled waters? Strategic decision‐making and value creation and appropriation from partnerships between public organizations

Oever

Martín

2018

Strategic Management Journal

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Research Summary Although partnerships have been conceptualized as vehicles for value creation, less is known about which partners appropriate more value out of them, especially among public organizations. We theorize how politics and procedural rationality in decision‐making respectively are associated with value creation and value appropriation from partnerships between public organizations. Analysis of data from the Dutch water authority sector (2008–2014) shows that organizations employing more politics in decision‐making appropriate more value from horizontal partnerships, whereas procedural rationality in decision‐making may enhance combined value creation but limits partner‐level value appropriation. Also as theorized, the collective decision‐making context constrains value appropriation by partners using a discrepant decision‐making approach. We discuss implications for research on public organizations, alliances, and strategic decision‐making. Managerial Summary Although much is known about how partnerships can create value for firms, we know relatively less about which of the partners can appropriate more value from them. In this paper, we theorize and find that (public) organizations that employ more politics in decision‐making can generally appropriate more value from partnerships. Organizations that are more procedurally rational, which entails the extensive collection and analysis of information to make decisions, are able to create more value for the partnership, but generally appropriate less value from the partnership. Moreover, an organization that has a different decision‐making approach than its partners' end up appropriating less value from the partnership. Thus, when forming partnerships, managers should carefully consider the way their potential partners make decisions.

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Section: Background: Value In Public Organizations and Decision-makingmentioning

confidence: 99%

Section: Dependent Variablesmentioning

confidence: 99%

Section: Analysis Identification Approach and Limitations On Infementioning

confidence: 99%

mentioning

confidence: 99%

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Fishing in troubled waters? Strategic decision‐making and value creation and appropriation from partnerships between public organizations

Oever

Martín

2018

Strategic Management Journal

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“…One of the advantages of ROA is that it offers a dynamic perspective which can explain the JV's stages, from formation to exercise [15]. The options embedded in JVs will have an impact on the distribution of the equity stakes because an investor who aims to capture the dynamic RO part will invest in a smaller share of the JV because this way (s)he limits the downside risk while preserving the opportunity to capture the upside potential [4].…”

Section: Joint Ventures (Jv)mentioning

confidence: 99%

A real options and joint ventures perspective for strategic decision-making process in the case of dynamic industrial environments

2017

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Abstract. Strategic decision -making process represents a challenge in a dynamic industrial environment. Nowadays, many instruments and techniques are used in the process of decision-making. The perspective regarding real options analysis (ROA), joint ventures (JVs) and strategic decision-making process (SDMP) is very important to be analyzed because it represents a key source to obtain competitive advantage in a turbulent environment characterized by competitiveness, dynamism and a proactive thinking. The aim of the paper is to offer an interesting framework that emphasizes the relationship between real options (ROs), JVs, transaction cost (TC), bargaining models (BM), agency theory (AT) and SDMP. Also, the paper analyzes a real case study and it suggests a business model that includes elements that conduce to an innovative management. The findings are very useful for decision-makers from organizations, researchers and students.

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The Choice of Stock Over Cash Payments in Mergers and Acquisitions: A Market‐Failure Account and Empirical Evidence

Tseng

Chen

2023

Can J Adm Sci

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Payments in mergers and acquisitions (M&As) can be all cash, all stock, or any combination of the two. However, using stock instead of cash in M&A payments has clear weaknesses that must be offset (e.g., valuation difficulty). In this study, we argue that stock payments can save on the costs of using the M&A market, which serves to compensate the inherent weaknesses of stock deals. Our empirical findings confirm that stock should account for a greater percentage of the payment in M&As that feature higher transaction costs. The market‐failure account for stock payments that we offer contributes to the M&A literatures in both finance and management.

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When the target may know better: Effects of experience and information asymmetries on value from mergers and acquisitions

Cited by 163 publications

References 85 publications

Fishing in troubled waters? Strategic decision‐making and value creation and appropriation from partnerships between public organizations

Fishing in troubled waters? Strategic decision‐making and value creation and appropriation from partnerships between public organizations

A real options and joint ventures perspective for strategic decision-making process in the case of dynamic industrial environments

The Choice of Stock Over Cash Payments in Mergers and Acquisitions: A Market‐Failure Account and Empirical Evidence

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