CORPORATE ACQUISITION DECISIONS UNDER DIFFERENT STRATEGIC MOTIVATIONS

Abstract

The type of acquisitions was more likely related to industry growth opportunities, indicating that the unrelated acquisition cases are more likely to be followed by higher industry growth rate than the related acquisition cases. While there were a substantially larger number of acquisition cases using the purchase method, the related acquisition cases used the pooling-of-interest method more frequently than in the unrelated acquisition cases. The firm-level analysis shows that the type of acquisition decisions was still related to acquiring firms’ industry growth rate. However, the post-acquisition performance measures, using firm’s growth and change in market share, could support prior studies in that the exclusive-related acquisitions helped firms grow more and get more market share than the exclusive-unrelated acquisitions. CEO’s compensation composition ratio was not related to the types of acquisition.

Citation

Chung, K.-H. (2004), "CORPORATE ACQUISITION DECISIONS UNDER DIFFERENT STRATEGIC MOTIVATIONS", Advances in Management Accounting (Advances in Management Accounting, Vol. 12), Emerald Group Publishing Limited, Bingley, pp. 265-286. https://doi.org/10.1016/S1474-7871(04)12012-1