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The value of intangible capital transfer in mergers

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  • Mamun, Abdullah
  • Mishra, Dev
  • Zhan, Lei

Abstract

We find that the value is created for acquirer shareholders in the mergers involving intangible capital transfer from targets to bidders; such value creation is positive and significant in the transfer of off-balance-sheet intangible capital and organizational capital as opposed to that of knowledge capital. Because the combined returns for bidders and targets are increasing in intangible capital transfer (while those of targets remain unaffected), we believe that the market perceives such transfers potentially create synergy. The market reaction to intangible capital transfer is positive and significant for bidders facing high-product market competition, in non-diversifying deals, and for high-tech combinations.

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  • Mamun, Abdullah & Mishra, Dev & Zhan, Lei, 2021. "The value of intangible capital transfer in mergers," Journal of Economics and Business, Elsevier, vol. 117(C).
    • Handle: RePEc:eee:jebusi:v:117:y:2021:i:c:s0148619521000382
    DOI: 10.1016/j.jeconbus.2021.106020
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    Keywords

    Intangible capital; Market for corporate control; Acquisitions; Takeovers; Agency problems; Event study;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • D2 - Microeconomics - - Production and Organizations

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