Managerial ability and acquirer returns
Journal
Quarterly Review of Economics and Finance
Journal Volume
68
Pages
171-182
Date Issued
2018-05
Author(s)
Lin, Chih Yen
Abstract
This paper examines the impact of managerial ability on the profitability of mergers and acquisitions. We find that acquisitions by firms with high managerial ability generate better announcement abnormal returns as well as better post-announcement abnormal returns than deals by firms with low managerial ability. We also find deals with high managerial ability pay significantly lower premiums than deals without. Further, we find that managers with high managerial ability perform better in scenarios with high environmental uncertainty, which suggests that high environmental uncertainty is an important scenario that should be incorporated into studies of the influence of managerial ability.
Subjects
Environmental uncertainty | Managerial ability | Mergers and acquisitions | Shareholder wealth
Publisher
ELSEVIER SCIENCE INC
Type
journal article