Time to complete the due diligence phase in mergers and acquisitions: impact of CEO psychological characteristics

Viswa Prasad Gada, Manish Popli and Shavin Malhotra

Applied Economics, 2021, vol. 53, issue 50, 5812-5825

Abstract: The CEO is the chief decision-maker with regard to corporate strategy, and extant literature highlights how CEOs’ psychological characteristics inform firms’ risky strategic choices. In this article, we focus instead on how CEOs’ psychological characteristics might lead to risk-mitigation actions. Building on the regulatory focus theory, we investigate the impact of CEO’s prevention focus on the due diligence process in merger and acquisition (M&A) deals. Using a sample of 339 majority-stake completed M&A deals by public firms from the United Kingdom, we find that CEOs having a stronger prevention focus increases the time these firms take to complete their M&A deals. We also find that this effect is mitigated when firms acquire target firms in related industries.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2021.1931005 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:53:y:2021:i:50:p:5812-5825

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2021.1931005

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().