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The effect of board size on shareholder value: Evidence from bank mergers and acquisitions

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  • Tampakoudis, Ioannis
  • Nerantzidis, Michail
  • Artikis, Panagiotis
  • Kiosses, Nikolaos

Abstract

This study examines the effect of board size on the economic impact of bank mergers and acquisitions (M&A) in the US. Using a hand-collected dataset of 508 M&A between 2012 and 2018, we find that board size is negatively related to acquirer excess returns. In an additional analysis, we show that large boards have positive value implications for banks that combine the CEO and chairman roles as well as for large banks. Our findings indicate that a “one-size-fits-all” approach to board size is not necessarily in the interests of shareholders; instead, a more flexible and proactive formulation is needed.

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  • Tampakoudis, Ioannis & Nerantzidis, Michail & Artikis, Panagiotis & Kiosses, Nikolaos, 2022. "The effect of board size on shareholder value: Evidence from bank mergers and acquisitions," European Management Journal, Elsevier, vol. 40(6), pages 883-894.
    • Handle: RePEc:eee:eurman:v:40:y:2022:i:6:p:883-894
    DOI: 10.1016/j.emj.2022.09.002
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    More about this item

    Keywords

    Board of directors; M&A; Banks; Agency theory; Resource-dependence theory;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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