Managerial ability and acquirer returns

Sheng-Syan Chen and Chih-Yen Lin

The Quarterly Review of Economics and Finance, 2018, vol. 68, issue C, 171-182

Abstract: This paper examines the impact of managerial ability on the profitability of mergers and acquisitions. We find that acquisitions by firms with high managerial ability generate better announcement abnormal returns as well as better post-announcement abnormal returns than deals by firms with low managerial ability. We also find deals with high managerial ability pay significantly lower premiums than deals without. Further, we find that managers with high managerial ability perform better in scenarios with high environmental uncertainty, which suggests that high environmental uncertainty is an important scenario that should be incorporated into studies of the influence of managerial ability.

Keywords: Managerial ability; Mergers and acquisitions; Environmental uncertainty; Shareholder wealth (search for similar items in EconPapers)
JEL-codes: G14 G34 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:68:y:2018:i:c:p:171-182

DOI: 10.1016/j.qref.2017.09.004

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