Work

Do Managerial Objectives Drive Bad Acquisitions?

Year: 1989

Type: report

Abstract: In a sample of 326 U.S. acquisitions between 1975 and 1987, three types of acquisitions have systematically lower and predominantly negative announcement period returns to bidding firms. The returns to bidding shareholders are lower when their firm diversifies, when it buys a rapidly growing target, and when its managers performed poorly before the acquisition. These results suggest that managerial objectives may drive acquisitions that reduce bidding firms' values. Copyright 1990 by American Finance Association.

Source: National Bureau of Economic Research

DOI: 10.3386/w3000

Authors: Randall Morck, Andrei Shleifer, Robert Vishny

Institutions: University of Alberta, National Bureau of Economic Research, Harvard University, University of Chicago

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2107912985

Cites:

Cited by: 270

Related to: 10