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Management as the sine qua non for M&A success

Author

Listed:
  • Manthos D. Delis

    (Montpellier Business School)

  • Maria Iosifidi

    (University of Surrey - Surrey Business School)

  • Pantelis Kazakis

    (University of Glasgow - Adam Smith Business School)

  • Steven Ongena

    (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; Centre for Economic Policy Research (CEPR))

  • Mike G. Tsionas

    (Montpellier Business School)

Abstract

This paper studies whether management quality in acquiring firms determines merger and acquisition (M&A) success. We model management practices as an unobserved (latent) variable in a standard microeconomic model of the firm and derive firm-year management estimates. We show that our measure is among the most important determinants of value creation in M&A deals. Our results are robust to the inclusion of acquirer fixed effects, to a large set of control variables, and to several other sensitivity tests. We also show that management explains, albeit to a lesser extent, acquirers’ return on equity and Tobin’s q.

Suggested Citation

  • Manthos D. Delis & Maria Iosifidi & Pantelis Kazakis & Steven Ongena & Mike G. Tsionas, 2020. "Management as the sine qua non for M&A success," Swiss Finance Institute Research Paper Series 20-102, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp20102
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    Cited by:

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    2. Delis, Manthos D. & Tsionas, Mike G., 2018. "Measuring management practices," International Journal of Production Economics, Elsevier, vol. 199(C), pages 65-77.

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    Keywords

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    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
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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