Director Histories and the Pattern of Acquisitions

Caleb Stroup and Peter Rousseau

No 13-03, Working Papers from Davidson College, Department of Economics

Abstract: We trace directors through time and across firms to study whether acquirers' access to non-public information about potential targets via their directors' past board service histories affects the market for corporate control. In a sample of publicly-traded U.S. firms, we find acquirers about 4.5 times more likely to buy firms where their directors once served. Effects are stronger when the acquirer has better corporate governance, the interlocked director has a larger ownership stake at the acquirer, or the director played an important role during past service. The findings are robust to endogeneity of board composition and controls for contemporaneous inter-firm interlocks. Publication Status: Published in Journal of Financial and Quantitative Analysis, 2015, 50(4):671-698.

Keywords: interlocking directorates; board networks; social networks; corporate governance (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2013-06
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Director Histories and the Pattern of Acquisitions (2015)
Working Paper: Director Histories and the Pattern of Acquisitions (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:dav:wpaper:13-03

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