This study explores the role of the top management team (TMT) in determining whether IPO firms in high-tech industry will engage in acquisitions during the post-IPO period
We collect IPO and TMT data from firm prospectuses, and acquisition and financial data from SDC Platinum and Compustat, respectively. Poisson regression analysis is applied to test the effect of TMT characteristics on acquisition activity.
Using 135 IPO firms, we find evidence that TMT composition directly influences acquisition activity of IPO firms during the post-IPO period. Specifically, we find that TMT experience serving as members other firms’ boards and TMT experience in senior level management positions are both positively associated with acquisition activity. TMTs with prior IPO experience and TMTs with longer organizational tenures are negatively associated with acquisition activity.
This study is among the first to examine the impact of TMT demography on newly public firms’ acquisition activity. In doing so, it adds meaningfully to our understanding of the factors driving such firms’ strategic behavior.
CitationDownload as .RIS
Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited