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Investors' Perceptions of Managerial Opportunism in Corporate Acquisitions: the moderating role of environmental conditions

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  • Eugene Kang

Abstract

I argue and found that the effectiveness of a firm's monitoring mechanisms to prevent managerial opportunism in acquisitions becomes more important under high environmental complexity and/or dynamism because of the increased information asymmetry between investors and top executives under these conditions. I also found that increased monitoring under non-complex and/or stable environments may be viewed negatively by investors, and that symbolic information about governance arrangements affects investors' evaluations of managerial opportunism in acquisitions. The results highlight the need for more research on factors that influence the explanatory power of agency theory. Copyright (c) 2006 The Author; Journal compilation (c) 2006 Blackwell Publishing Ltd.

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  • Eugene Kang, 2006. "Investors' Perceptions of Managerial Opportunism in Corporate Acquisitions: the moderating role of environmental conditions," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(5), pages 377-387, September.
  • Handle: RePEc:bla:corgov:v:14:y:2006:i:5:p:377-387
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    1. Luigi Zingales & Raghuram G. Rajan, 2003. "Banks and Markets: The Changing Character of European Finance," NBER Working Papers 9595, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bell, R. Greg & Moore, Curt B. & Filatotchev, Igor, 2012. "Strategic and institutional effects on foreign IPO performance: Examining the impact of country of origin, corporate governance, and host country effects," Journal of Business Venturing, Elsevier, vol. 27(2), pages 197-216.

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