Left at the Altar? A Relational View of Merger and Acquisition Announcements in the 1990s

Ruth V. Aguilera, John C. Dencker and Xavier Escandell
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Ruth V. Aguilera: U of Illinois at Urbana-Champaign
John C. Dencker: U of Illinois at Urbana-Champaign
Xavier Escandell: U of Illinois at Urbana-Champaign

Working Papers from University of Illinois at Urbana-Champaign, College of Business

Abstract: In this paper, we analyze data on the world's largest merger and acquisition (M&A) announcements in the 1990s to explore the relational factors that determine their completion or withdrawal. Existing research on this little understood phenomenon in the M&A process typically focuses on the characteristics and actions of acquirer firms to understand financial and strategic M&A elements. We offer a new perspective by focusing on the dyadic relationship between acquirer and target firms. Controlling for strategic and financial factors, we find that the completion of an announced M&A is more likely to the extent that the relational capabilities stemming from country-level, industry-level and organizational-level factors generate a cooperative and trustworthy relationship. We conclude by discussing theoretical and managerial implications of our multi-level relational model.

JEL-codes: D21 D23 D74 D81 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ecl:illbus:05-0111

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