Do firms with specialized M&A staff make better acquisitions?

Sinan Gokkaya, Xi Liu and René M. Stulz

Journal of Financial Economics, 2023, vol. 147, issue 1, 75-105

Abstract: We open the black box of the M&A decision process by examining whether specialized M&A staff, who perform a wide range of acquisition-related functions, improve acquisition performance. We find that the presence and the quality of specialized M&A staff is one of the most economically important determinants of acquisition performance. We explore mechanisms through which specialized M&A staff improve acquisition performance and investigate why only less than half of US firms employ such staff. Agency costs are a first-order determinant for specialized M&A staff's value-creation role. Such staff do not improve acquisition performance in firms with heightened agency conflicts.

Keywords: Mergers and acquisitions; Acquisitions; Corporate takeover market; Corporate development; M&A staff (search for similar items in EconPapers)
JEL-codes: G14 G20 G24 G30 G34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:147:y:2023:i:1:p:75-105

DOI: 10.1016/j.jfineco.2022.09.002

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