Skill differences in corporate acquisitions

Jeffrey Jaffe, David Pedersen and Torben Voetmann

Journal of Corporate Finance, 2013, vol. 23, issue C, 166-181

Abstract: Are there skill differences in mergers and acquisitions? To investigate this question, we focus on persistence in the performance of corporate acquirers. We find persistence only when successive deals occur under the same CEO and conclude that skill differences in acquisitions reside with the CEO, not with the firm as a whole. These differences are economically meaningful. An acquirer that was successful in its last deal and kept its CEO earns 1.02% more on its next deal than does a previously-unsuccessful firm that kept its CEO. This percentage difference is equivalent to a $175million difference in value creation.

Keywords: Mergers and acquisitions; Skill; Persistence; CEO (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:23:y:2013:i:c:p:166-181

DOI: 10.1016/j.jcorpfin.2013.08.007

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