Influence of shareholders’ support over mergers and acquisitions in US banks

Marcos Vizcaíno-González and Julio Navío-Marco

Economic Research-Ekonomska Istraživanja, 2018, vol. 31, issue 1, 228-239

Abstract: Using data about the US banking industry, the study investigates how the support disclosed by funds in corporate meetings influences the success of the completion of mergers and acquisitions (M&A). The methodological approach relies on the use of instrumental variables with the generalised method of moments (GMM). The results indicate that the voting support exercises a negative influence over the success of M&A, validating the probable presence of agency-driven behaviour in explaining M&A completion, and indicating that low governance and activism inspires independent behaviour of managers, proceeding against the wishes, position or interests of shareholders. Considering that voting performance has been reported as a proxy for reputational harm, the results provide some understanding about how the success in M&A in the US banking industry may be related to reputational consequences infiltrated through voting decisions.

Date: 2018
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DOI: 10.1080/1331677X.2018.1429296

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