Corporate boards and acquirer returns: international evidence

Mihail Miletkov (Peter T. Paul College of Business and Economics, University of New Hampshire, Durham, New Hampshire, USA)
Sviatoslav Moskalev (Department of Economics & Finance, Adelphi University, Garden City, New York, USA)
M. Babajide Wintoki (School of Business, University of Kansas, Lawrence, Kansas, USA)

Managerial Finance

ISSN: 0307-4358

Publication date: 9 March 2015



The purpose of this paper is to examine the effect of board structure on non-US acquirer returns in 11,499 acquisition transactions from 60 countries during the period from 2001 to 2011.


In this paper the authors employ event study methodology and regression analyses including instrumental variables two-stage least squares regressions.


The authors find that board independence in non-US firms is associated with significantly higher acquirer returns, but this effect is only present in countries with lower levels of investor protection. The authors contribute to the literature by documenting that due to the substitution effect between internal and external governance, when external governance mechanisms are not adequately developed, better internal governance (as measured by higher degree of board independence) reduces agency problems and leads to better firm decisions and outcomes (as measured by the quality of corporate acquisitions).


The paper is the first to empirically examine the relation between board independence and acquirer returns in non-US firms. The findings have important implications for both company managers and national policy makers who are debating the costs and benefits associated with increasing the degree of board independence in publicly traded companies around the world.



Miletkov, M., Moskalev, S. and Wintoki, M.B. (2015), "Corporate boards and acquirer returns: international evidence", Managerial Finance, Vol. 41 No. 3, pp. 244-266.



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