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In this paper, the knowledge-based view of the firm is applied to theoretically elucidate and empirically examine the influence of target industry growth on premium payments in cross-border acquisitions. This study aims to extend internally driven Mergers and Acquisitions research efforts of acquirers to industry contingencies of targets by analyzing cross-border acquirers located within the group of seven (G7) countries.

This study’s investigation covers 209 cross-border acquisitions from 2012 to 2019 undertaken by firms located within the G7 countries. This paper used generalized estimation equations method to test the hypotheses applying Gaussian distribution for the dependent variable, an identity link function, exchangeable correlation structure and robust standard errors.

This study’s results reveal that target industry growth determines premiums. Furthermore, this study shows that acquirer industry growth, as well as acquirer slack, moderates this relationship. This study is built on the notion that industry contingencies influence premiums even when target firms are based in foreign countries.

To the best of the authors’ knowledge, unlike other studies, this is the first to explicitly focus on premiums for multiple cross-border acquisitions by hand selecting nine years of industry sale figures for 53 industries separately in each of the G7 nation countries (leading to 371 separate downloads of data samples). This study contends that industry growth of cross-border targets matters for premium payments.

The study aims at inquiring into the relationship between acquirer–target business similarity and mergers and acquisitions (M&A) transaction outcomes.

Relying on textual analysis of acquirers' and targets' business descriptions from M&A transaction synopses, the authors establish that posttransaction operating outcomes are negatively associated with acquirer–target business similarity.

While similar business profiles allow for optimization of overheads, sales growth and margins demonstrate better dynamics when acquirers and targets are more dissimilar, which allows for greater competitive gains. On average, targets are more dissimilar from acquirers than acquirers are from their competitors. The degree of competition within acquirers' industries and acquirer–competitors' business similarity are found to be positively associated with the likelihood of engaging in serial horizontal acquisitions involving more similar targets, mostly from the domestic market. Competitive pressure is evidenced to push acquirers for a faster completion of acquisition process. Cross-border acquisitions are found to be associated with lower acquirer–target and acquirer–competitors' similarity, which suggests that Chinese companies expand overseas primarily for strategic reasons of gaining a competitive edge rather than to simply improve sales.

The paper contributes to the limited pool of empirical literature relying on text mining techniques to establish the determinants of M&A transaction outcomes. The methodology used in the study outperforms the conventional techniques of operationalization of business similarities through General Industry Classification Standard (GICS) industry matching. The study investigates the intermediating role of intraindustry competition in fostering firms' acquisitiveness.

The paper investigates the market performance of strategic acquisitions for growth in the fifth and sixth merger waves and outlines the major determinants that affect the performance of acquiring companies in these most complex and most challenging corporate transactions.

To perform the quantitative analysis a unique data sample was built out of acquisitions performed in the 5th and 6th merger waves with an only single purpose – strategic growth. Their performance was first analyzed using the method of market-based event study. In addition, the impact of several non-accounting determinants identified through a thorough literature review was tested using univariate/multivariate regression analysis.

The new findings of the study state that strategic acquisitions for growth created more value for acquiring companies if they were completed internationally and involved an acquisition of a middle-sized company. Moreover, the acquisition of targets in the less related industries (2-SIC) led to stronger performance of acquirers, especially in the international settings.

The study suggests additional directions for future research. The future analysis can investigate the post-merger acquisition performance of strategic acquirers and can focus on additional financial (accounting) determinants in the evaluation of performance. This perspective can not only address the limitations imposed by the assumption of efficient capital markets but also provide additional insights.

The results of current study have important implications for executives performing M&A for growth. They show that the market reaction to M&A announcement can be at least partially anticipated and help managers to plan their strategic moves based on a defined set of variables.

The study contributes to the sustainable, value-creating growth dynamics and encourages Executives to “lead for value.”

(1) In contrast to the existing studies that do not differentiate between the transaction rationale in their analysis, this paper focuses explicitly only on those acquisitions that have strategic growth as their primary objective and responses therefore, to the problem stated by Halpern (1983). This approach helps to mitigate the distortion of results and make a reliable assessment of the strategic move. (2) The results of quantitative analysis also outline that acquisition of mid-sized targets and larger degree of diversification (2-SIC, international focus) code were associated with higher value creation.

本文旨在研究於第五和第六波的併購浪潮中為增長而作出的策略性收購的市場表現;本文亦概述在這些極其複雜的和極具挑戰性的公司交易中影響作收購公司的表現的主要因素.

為了能進行定量分析,研究人員收集在第五及第六波的併購浪潮中以策略性增長為唯一目的的收購個案、建立一個獨特的數據樣本。研究人員首先以基於市場的事件研究法分析那些進行了收購的公司的表現,並以單變量/多變項迴歸分析法去試驗那幾個透過深入的文獻研究而找到的非會計的決定因素的影響.

研究得出的新發現是、如果以增長為目的的策略性收購是於國際間完成及涉及收購中型公司的話,則這收購行動會給進行收購的公司帶來更多價值。而且、如果收購目標的產業與作收購公司的不太相關的話 (2-標準產業分類),收購行動會為進行收購的公司帶來更強的表現、特別是在國際環境下進行這收購行動.

(1) 有別於現時其它於其分析中不區分交易理由的研究，本文明確地表示只集中探討那些以帶來策略性增長為主要目標的收購；因此、本研究對 (哈爾彭，1983年)(Halpern, 1983) 陳述的問題作出了回應。本研究的理念有助於減輕我們對收購結果的曲解，從而讓我們對策略性行動能作出可靠的評估. (2) 定量分析的結果、亦概述了以中型公司為目標的收購及更大程度的多樣化 (2－標準產業分類、以國際為焦點) 代碼與創造更大價值是有關聯的。

本研究的結果對學術界及管理人員均具吸引力，亦為策略規劃提供一個額外的工具.

本研究可帶來可持續的及可創造價值的增長動力，又可鼓勵行政主管採用以價值為本的領導方針.

Based on the event study methodology this chapter tests value creation, buying growth, and hubris hypotheses on the sample of 62 Japanese mergers with announcement in period 1993–2005. We find an average 1.19% cumulative abnormal return in 3 days surrounding the merger announcement. The findings suggest that differences in financial resources allocation pattern may provide a source of value gain. Further, mergers with fast-growing target are value enhancing when acquirer has prior ownership in target. Announcement returns are adversely related to acquirer's past performance, implying that well-performing acquirers possibly overestimate the true value of deal and overpay target.

The link between interlocking directors and mergers and acquisitions (M&A) efficiency has been analyzed in an information asymmetry environment. Despite an abundance of evidence highlighting that interlocking directors do contribute to M&A efficiency in an acquirer-target binary relationship, the target is embedded in a complex network of supplier-customer relationships, which implies that the acquirer needs to consider the value of suppliers, distributors and retailers in the target’s supply chain in improving M&A efficiency. Through the lenses of acquirer-target multivariate relationships, this paper aims to examine how directors with supply chain experience (DSCs) act as heterogeneous network pipes to affect M&A efficiency.

Using a sample of 311 A-share listed firms on the Shanghai and Shenzhen stock exchanges in China during 2011–2020, this paper investigates the relationship between DSCs and M&A efficiency by using ordinary least squares (OLS) regression.

Through empirical research, we verify a negative relationship between DSCs and M&A duration and an inverted U-shaped relationship between both DSCs and M&A performance, revealing the complexity of the relationship between experience and efficiency. Furthermore, drawing on upper echelon theory, the information value of DSCs will be greatly reduced when executives have overconfident psychological characteristics, which are mainly shown to negatively moderate the relationship between DSCs and M&A performance. We also conduct multiple robustness tests and supplemental analyses to illustrate the robustness and boundaries of our findings. Finally, DSCs are likely more important in environments among growth and mature firms as well as high-growth industries.

We break through the assumption that interlocking directors contribute to M&A efficiency in an acquirer-target binary relationship and examine the impact of DSCs on M&A efficiency based on micro-empirical evidence from the value of target-related upstream or downstream industries, which extends the connotation of interlocking directors and enriches the study related to factors influencing M&A efficiency.

While the existing studies largely suggest that valuation uncertainty benefits acquirers, who apply discounts to targets' value attributable to information asymmetry, the authors argue that the opposite may be the case.

Through multivariate econometric analysis of transaction data, the authors establish the link between the degree of valuation uncertainty measured by targets' track of public listing and acquisition premia. The authors use text-mining tools to measure acquirer–target similarity and control for its role in intermediating the posited empirical relationships.

Having analyzed 618 acquisitions involving listed targets from China, the authors find that acquirers pay higher valuation premia for the more recently listed and relatively younger companies than for those with a longer history since floatation. Similar patterns apply to valuation multiples. Higher valuations are partially attributable to premia for control, as acquirers are likelier to buy a majority stake in the recently listed firms, especially if the latter are similar to them. Such transactions take less time to complete and involve a transfer of larger share blocks despite the higher degree of information asymmetry and a frequent lack of targets' operational profitability. The authors also observe a significant premium for target–acquirer similarity: acquirers appear to rush deal completion due to possible overestimation of targets' potential and familiarity bias.

The authors show that acquisition premia may be driven by acquirers' proclivity to place risky investment bets on the growth potential of opaque targets. This pattern may partially explain frequent failures of mergers and acquisitions (M&A).

The firm size hypothesis – takeover likelihood (TALI) decreases with target firm size (SIZE) – has enjoyed little traction in the TALI modelling literature; hence, this paper aims to redevelop this hypothesis while taking account of prevailing market conditions – capital liquidity and market performance.

The study uses a logit modelling framework to model TALI. Model performance is assessed using receiver operating characteristic (ROC) curve analysis. The empirical analysis is based on a UK sample of 34,661 firm-year observations drawn from 3,105 firms and 1,396 M&A deals over a 30-year period (1987-2016).

While acquirers generally seek smaller targets because of transaction cost constraints, the paper shows that the documented negative relation between SIZE and TALI arises from sampling bias. Over a full sample, mid-sized firms are most at risk of takeovers. Additionally, market conditions moderate the SIZE–TALI relationship, with acquirers more inclined to pursue comparatively larger targets when financing costs are low and market growth or sentiment is high. The results are generally robust to endogeneity.

Sample truncation on the basis of SIZE leads to empirical misspecification of the TALI–SIZE relation. In an unbiased sample, an inverse U-shaped specification between TALI and SIZE sufficiently models the underlying relation and leads to improvements in the predictive ability of TALI models.

This study advances a new firm size hypothesis which is consistent with classic M&A theories. The study also evidences market conditions as a moderator of the acquirer’s choice of target SIZE. A new model specification which recognises the non-linear relation between TALI and SIZE and accounts for the moderating effect of market conditions on the SIZE-TALI relationship leads to improvements in the performance of TALI prediction models.

This paper aims to examine the association between financial reporting quality in target companies and acquisition profitability in a sample of 280 acquisitions in South Korea between 2002 and 2011.

Using the accruals quality measure developed by McNichols (2002) as a proxy for financial reporting quality, it was found that high-quality financial reporting in target companies is associated with more profitable acquisitions for the acquirer, as measured by the acquirer’s announcement returns.

It was found that high-quality financial reporting in target companies is associated with more profitable acquisitions for the acquirer, as measured by the acquirer’s announcement returns. This finding suggests that higher-quality accounting information leads to better decision-making during acquisitions. It was also found that the importance of financial reporting quality increases when information about the target company is scarce. In addition, it was found that the financial reporting quality of target companies is less important when the agency costs of the acquirer are high.

This analysis also complements several recent papers that examine target firm accounting information and mergers and acquisitions (M&A) returns (Shalev and Martin, 2009; McNichols and Stubben, 2012). By expanding this analysis, the authors help to provide a more complete understanding of how target firm’s accounting quality relates to the valuation of the target company and future expected synergies in M&A deal practice.

This study is one of a growing body of literature on the relations between financial reporting quality and investment decisions (Bens and Monahan, 2004; Biddle and Hilary, 2006; Hope and Thomas, 2008; McNichols and Stubben, 2008; Biddle et al., 2009; Francis and Martin, 2010). These results extend and generalize the results of prior studies, in that data pertinent to acquisition profitability of M&As in South Korea are used.

Young/small firms are often seen as acquisition targets, but rarely viewed as potential acquirers. However, in this study we found that one-third of the young ventures in our sample pursued aggressive growth though acquisition of their competitors. Furthermore, contrary to conventional wisdom, we found striking evidence that young firms pursuing growth via acquisition significantly outperformed their peers who pursued growth via internal development. Thus, growth via acquisition clearly represents a viable strategic option for young, small firms.

This paper aims to examine how integration modes impact the acquirer knowledge diffusion capacity of overseas mergers and acquisitions (M&As) effected by emerging market firms and the role played by the global innovation network position of the acquiring firms in affecting this relationship.

Through the use of structural equation modelling and bootstrap testing, the hypotheses are tested by drawing upon a sample of 102 overseas M&As effected by listed Chinese manufacturing companies.

The results show that acquirers from emerging countries are unable to increase the knowledge diffusion capacity unless they choose the right post-merger integration mode. This paper also finds that the relationship between integration mode and knowledge diffusion is channelled through the centrality and structural holes of acquirers in the global innovation networks. When considering the combinations of different resource similarities and complementarities of the acquired firms, differences emerge in the integration model and network embedded path of acquirers in emerging countries.

Emerging market multinational enterprises should consider post-merger integration as a crucial facilitator to the crafting of global innovation network positions that promote knowledge diffusion. The choices of integration mode and brand management autonomy should be matched with the resource similarities and complementarities that exist between the acquirer and target firms.

Based on the resource orchestration theory and by focussing on network centrality and structural hole as the crucial links, this study provides a nuanced understanding of the relationship between post-merger integration and knowledge diffusion and sheds light on latecomer firms from emerging countries.