Learning from repetitive acquisitions: Evidence from the time between deals

Nihat Aktas, Eric de Bodt and Richard Roll

Journal of Financial Economics, 2013, vol. 108, issue 1, 99-117

Abstract: Knowledge gleaned from previous acquisitions may confer valuation expertise and other benefits. But numerous acquisitions also entail costs, due to problems of incorporating diverse units into an ever larger firm. Such benefits and costs are not directly observable from outside the firm. This article proposes a simple model to infer their relative importance, using the time between successive deals. The data requirements are minimal and allow the use of all mergers and acquisitions during 1992–2009 (more than 300,000 deals). The results provide evidence of learning gains through repetitive acquisitions, especially under CEO continuity and when successive deals are more similar.

Keywords: Acquisitions program; Learning; Integration costs; Time between successive deals (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (62)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:108:y:2013:i:1:p:99-117

DOI: 10.1016/j.jfineco.2012.10.010

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