Board governance and acquirers’ returns: A study of Australian acquisitions

Winson Chan and David Emanuel

Australian Journal of Management, 2011, vol. 36, issue 2, 174-199

Abstract: This paper examines the relation between acquirer (abnormal) returns and governance characteristics of the board of directors of the acquiring firm. The central question is: Are higher (acquirer) abnormal returns associated with ‘better’ board governance, having controlled for other factors that can affect returns? As acquisitions represent a significant change in the acquirer’s corporate structure and operations, the determinants of a successful acquisition are of considerable importance. We examine the relation between returns and governance variables using a sample of 80 Australian acquisitions that occurred between 1999 and 2005. We use both short-run and long-run (abnormal) returns to capture the wealth effects of the acquisitions. We find very limited evidence of a connection between our governance variables and acquirer returns. JEL Classification: G14, G34.

Keywords: acquirer returns; acquisitions; board governance (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:36:y:2011:i:2:p:174-199

DOI: 10.1177/0312896210394499

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