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Family firms and high technology Mergers & Acquisitions

Author

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  • Paul André

    ()

  • Walid Ben-Amar

    ()

  • Samir Saadi

    ()

Abstract

We examine whether family firms undertake value creating high technology M&A. We also examine whether level of ownership, diversification, agency issues and CEO type matter. Our sample consists of high-technology M&A undertaken by Canadian firms over the period 1997–2006. Canada offers a setting with many family firms and the use of control enhancing mechanisms such as dual class shares and pyramid structures. We find a positive relationship between family ownership and announcement period abnormal returns. This relationship, however, starts to decrease at higher levels of ownership but remains overall positive. We also show that the agency conflict between shareholders and professional managers has a detrimental impact on announcement period abnormal returns whereas the conflict between controlling and minority shareholders via control enhancing mechanisms does not. Finally, we document that founder CEO undertake better high tech M&A than descendant or hired CEO. Copyright Springer Science+Business Media, LLC. 2014

Suggested Citation

  • Paul André & Walid Ben-Amar & Samir Saadi, 2014. "Family firms and high technology Mergers & Acquisitions," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(1), pages 129-158, February.
  • Handle: RePEc:kap:jmgtgv:v:18:y:2014:i:1:p:129-158
    DOI: 10.1007/s10997-012-9221-x
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    Keywords

    Family firms; Family ownership; Mergers & Acquisitions; Corporate governance; Control enhancing mechanisms; High-technology firms; Event studies; G14; G34;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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