Apparently mistaken decisions are ubiquitous. To what extent does this reflect irrationality, as opposed to a rational trade-off between the costs of information acquisition and the expected benefits ...of learning? We develop a revealed preference test that characterizes all patterns of choice "mistakes" consistent with a general model of optimal costly information acquisition and identify the extent to which information costs can be recovered from choice data.
Does director gender influence CEO empire building? Does it affect the bid premium paid for target firms? Less overconfident female directors less overestimate merger gains. As a result, firms with ...female directors are less likely to make acquisitions and if they do, pay lower bid premia. Using acquisition bids by S&P 1500 companies during 1997–2009 we find that each additional female director is associated with 7.6% fewer bids, and each additional female director on a bidder board reduces the bid premium paid by 15.4%. Our findings support the notion that female directors help create shareholder value through their influence on acquisition decisions. We also discuss other possible interpretations of our findings.
•It is known that women are less overconfident than men.•We expect that less overconfident female directors less overestimate merger gains.•We show that each additional female director is associated with 7.6% fewer bids.•We show that each additional female bidder director reduces bid premium by 15.4%.•Our findings provide support that female directors help create shareholder value.
Mars-Venus Marriages: Culture and Cross-Border M&A Chakrabarti, Rajesh; Gupta-Mukherjee, Swasti; Jayaraman, Narayanan
Journal of international business studies,
02/2009, Letnik:
40, Številka:
2
Journal Article
Recenzirano
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Using a sample of over 800 cross-border acquisitions during 1991-2004, we find that, contrary to general perception, cross-border acquisitions perform better in the long run if the acquirer and the ...target come from countries that are culturally more disparate. We use mainly the Hofstede measure of cultural dimensions to measure cultural distance, but also examine alternative proxies. The positive relationship of performance to cultural distance persists after controlling for several deal-specific variables and country-level fixed effects, and is robust to alternative specifications of long-term performance. Cash and friendly acquisitions tend to perform better in the long run. There is also some evidence of synergies when acquirers are from stronger economies relative to the targets.
Diversified acquirer shareholders can profit from value-destroying acquisitions not only through their target stakes, but also through stakes in non-merging rival firms. Announcement losses are ...largely mitigated for the average acquirer shareholder when accounting for wealth effects on their rival stakes. Ownership by acquirer shareholders in non-merging rivals is negatively associated with deal quality and positively associated with deal completion. Funds with more rival ownership are more likely to vote in favor of the acquisition. Overall, these results show that many so-called “bad deals” are often in the interest of acquirer-firm shareholders.
Many research questions in fields such as personalized medicine, drug screens or systems biology depend on obtaining consistent and quantitatively accurate proteomics data from many samples. SWATH‐MS ...is a specific variant of data‐independent acquisition (DIA) methods and is emerging as a technology that combines deep proteome coverage capabilities with quantitative consistency and accuracy. In a SWATH‐MS measurement, all ionized peptides of a given sample that fall within a specified mass range are fragmented in a systematic and unbiased fashion using rather large precursor isolation windows. To analyse SWATH‐MS data, a strategy based on peptide‐centric scoring has been established, which typically requires prior knowledge about the chromatographic and mass spectrometric behaviour of peptides of interest in the form of spectral libraries and peptide query parameters. This tutorial provides guidelines on how to set up and plan a SWATH‐MS experiment, how to perform the mass spectrometric measurement and how to analyse SWATH‐MS data using peptide‐centric scoring. Furthermore, concepts on how to improve SWATH‐MS data acquisition, potential trade‐offs of parameter settings and alternative data analysis strategies are discussed.
SWATH‐MS combines deep proteome coverage with quantitative consistency and accuracy and is often the method of choice for personalized medicine, drug screens or systems biology. This tutorial provides guidelines on how to set up SWATH‐MS experiments, perform the mass spectrometric measurements and analyse the data.
Research summary: Inconclusive findings about the effect of national cultural differences on post-acquisition performance may be created by the failure to distinguish among the different cultural ...dimensions and the asymmetry of cultural differences. To demonstrate a different approach, this study focuses on one dimension of national cultural values—power distance value (PDV) and develops a framework for the asymmetric effect of PDV differences in creating two types of conflicts. The analysis of 2,115 cross-border acquisitions in the global information technology industry shows that PDV differences undermine the long-term post-acquisition performance of acquirers. This effect is stronger when acquirers are higher than targets in PDV than when the opposite is the case. This asymmetric effect of PDV difference depends on national status difference, business relatedness, and acquisition experience. Managerial summary: National cultural differences can create "cultural clashes " to undermine the value creation by cross-border acquisitions. During integration, individuals react to the acquirer-target hierarchy according to their respective power distance value (PDV): the extent to which they value equality (low PDV) or hierarchy (high PDV). PDV divergence results in two types of conflicts, depending on whether acquirers are higher or lower than targets in PDV. The two types of conflicts vary in the magnitude of their harmful effect on post-acquisition performance. Both types of conflicts are more detrimental when acquirers are higher than targets in country status and when individuals need to interact more intensely. Acquisition experience can both help and harm post-acquisition performance. These findings offer important implications for managing cross-border acquisitions.
This article explores how within-country diversity of both language and religion influences the ownership structure of foreign acquisitions. Commentators have acknowledged the potential importance of ..."within-country diversity," but to date this issue has received minimal empirical attention. We propose that diversity plays two distinct roles. Namely, diversity within the host country may be an additional source of behavioral uncertainty and information asymmetry, over and above the effects arising from cross-national differences. Moreover, diversity within the home country may increase the cognitive complexity of the decision makers, moderating the firm's response to the distance and diversity of the host country. Results based on foreign acquisitions across 67 acquirer and 69 target countries confirm both of these roles. While the main focus of this article is on the role that within-country diversity plays in international business decisions, it also makes contributions in terms of expanding the range of dimensions of distance investigated in the cross-border acquisition literature, in highlighting a potentially positive role that diversity might play in such acquisitions, and in providing a potential explanation for asymmetries in distance – that is, differences in cognitive complexity.
Abstract
Research Summary
Emerging‐market multinational enterprises (EMNEs) are known for their “light‐touch” integration after cross‐border acquisitions. That is, compared with their ...developed‐country counterparts, EMNEs are more likely to retain the top management team (TMT) of the target firms. In this paper, we argue that this difference in retention rate can be explained by country, cohort, and firm effects. While the literature mostly associates EMNEs with where they are from (country effect), EMNEs are also new to cross‐border acquisitions (firm effect) and among the first in their peers to venture abroad (cohort effect). Analysis on a sample of 1862 absorption‐type cross‐border acquisitions supports our hypotheses that while the country effect persists, the difference in retention rate narrows significantly as EMNEs and their peers gain more relevant cross‐border acquisition experience.
Managerial Summary
The retention of top management team in target firms is a critical aspect of post‐acquisition integration (PAI). In this study, we examine the reasons behind the curious observation that, compared with acquirers from developed countries, multinational enterprises from emerging markets (EMNEs) are more likely to keep the target firm TMT intact, even in deals where extensive integration is in line with the overall acquisition objectives. Our analyses show that the legitimacy constraints associated with EMNEs' less developed home countries indeed present initial challenges to their integration efforts. However, these differences narrow significantly as EMNEs and their peers accumulate more experience in similar cross‐border acquisitions. This study highlights the dynamic nature of PAI strategies and the large variance among firms beneath the “EMNE” label.
Combining the World Englishes framework with First Language Acquisition methodology, this book investigates children’s acquisition of L1 English in the context of multilingual Singapore, one of the ...traditional Kachruvian Outer Circle or ESL countries. The book investigates language choice, use, and dominance in Singaporean families, identifies common linguistic characteristics of L1 Singapore English, as well as the acquisitional route that Singaporean children take. It discusses characteristics at the different levels of language organization, i.e., phonological, morphosyntactic, lexical, and pragmatic features, drawing on a variety of systematically elicited data and Praat-based acoustic analyses. Comparing the results to similar data obtained from children living in England (both mono- and bi-/multilingual), the book also sheds light on how the acquisitional steps taken by Singaporean children differ from or are similar to traditional native speakers of English and children from immigrant families in England.
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