Abstract
This study explores the impact of founders on acquirers’ merger performance. The results show that the acquisition of founding firms has a relatively negative impact on acquirers’ performance, whereas founders who remain in a firm post-merger have a relatively positive influence. Moreover, I find significant differences between the acquirers of firms where founders remain and the acquirers of firms where founders leave. The acquirers of firms in which founders remain exhibit a higher Tobin’s q and greater cumulative abnormal returns. This phenomenon is more prominent when founders remain as daily executives than when founders remain as non-daily directors. Additionally, the length of time that the founders remain with the merged firm affects the findings. Finally, I document a robust positive relationship between the remaining founders and acquirers’ value or stock returns, indicating the value of founders to acquirers.
Original language | English |
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Peer-reviewed scientific journal | Pacific-Basin Finance Journal |
Volume | 35 (2015) |
Issue number | Part A |
Pages (from-to) | 273-297 |
Number of pages | 25 |
ISSN | 0927-538X |
DOIs | |
Publication status | Published - 01.2015 |
MoE publication type | A1 Journal article - refereed |
Keywords
- 512 Business and Management