Do Firms with Specialized M&A Staff Make Better Acquisitions?
Sinan Gokkaya,
Xi Liu and
René M. Stulz
No 28778, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
We open the black box of the M&A decision process by constructing a comprehensive sample of US firms with specialized M&A staff. We investigate whether specialized M&A staff improves acquisition performance or facilitates managerial empire building instead. We find that firms with specialized M&A staff make better acquisitions when acquisition performance is measured by stock price reactions to announcements, long-run stock returns, operating performance, divestitures, and analyst earnings forecasts. This effect does not hold when the CEO is powerful, overconfident, or entrenched. Acquisitions by firms without specialized staff do not create value, on average. We provide evidence on mechanisms through which specialized M&A staff improves acquisition performance. For identification, we use the staggered recognition of inevitable disclosure doctrine as a source of exogenous variation in the employment of specialized M&A staff.
JEL-codes: G14 G24 G30 G34 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-bec, nep-com, nep-cwa, nep-fmk and nep-ind
Note: CF
References: Add references at CitEc
Citations:
Published as Sinan Gokkaya & Xi Liu & René M. Stulz, 2023. "Do firms with specialized M&A staff make better acquisitions?," Journal of Financial Economics, vol 147(1), pages 75-105.
Downloads: (external link)
http://www.nber.org/papers/w28778.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:28778
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w28778
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().