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CEO power, product market competition and the acquisition motive for going public

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Listed:
  • Jian Huang
  • Bharat A. Jain
  • Yingying Shao

Abstract

This study finds that CEO power and product market competition differentially influence post‐IPO growth strategy and its economic consequences. Powerful CEOs are more likely to prefer acquisition growth over internal investment. Further, while CEO power is positively related to the likelihood, frequency and size of post‐IPO acquisitions, it is unrelated to the post‐IPO performance of acquisitive firms. In contrast, product market rivalry does not increase post‐IPO acquisitiveness but is positively related to the performance of acquirers. Finally, CEO power enhances the performance of acquisitive IPO firms only when faced with intense competitive rivalry.

Suggested Citation

  • Jian Huang & Bharat A. Jain & Yingying Shao, 2019. "CEO power, product market competition and the acquisition motive for going public," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(4), pages 2479-2507, December.
    • Handle: RePEc:bla:acctfi:v:59:y:2019:i:4:p:2479-2507
    DOI: 10.1111/acfi.12316
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    Cited by:

    1. Simon Segal & James Guthrie & Johannes Dumay, 2021. "Stakeholder and merger and acquisition research: a structured literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2935-2964, June.
    2. Sun, Li & Skousen, Christopher J., 2022. "CEO power and discontinued operations," Advances in accounting, Elsevier, vol. 58(C).
    3. Chen Cai & Huimin Li & Haigang Zhou, 2022. "Learning‐by‐doing: the experience effect in mergers and acquisitions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1189-1229, April.

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