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The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay…
The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay between the CEO and other top management team (TMT) members.
Drawing on tournament theory, the authors argue that acquisitive and organic growth strategies have different effects on CEO-TMT pay disparity.
The authors find that acquisitive growth, measured through the number and size of acquisitions, increases CEO-TMT pay disparity while organic growth has no effect on CEO-TMT pay disparity.
The findings, based in the context of the Netherlands, imply that boards in their monitoring activity may need to take into account the potential incentive effects of acquisitive activity as CEOs may have a greater motivation to engage in acquisitions than their fellow TMT members.
This paper contributes to the literature on relative compensation and incentives and the literature on managerial compensation and firm strategy. To investigate the role of firm growth in increasing CEO-TMT pay disparity, the authors adopt a fine-grained approach along two dimensions. First, the authors disaggregate firm growth into organic and acquisition driven firm growth. Second, the authors disaggregate pay disparity in these components.
Many announced cross-border mergers and acquisitions (M&As) are never brought to completion despite potential negative consequences to acquirers and targets. This paper…
Many announced cross-border mergers and acquisitions (M&As) are never brought to completion despite potential negative consequences to acquirers and targets. This paper presented evidence on the dynamic effects of spatial distance and two industry-level characteristics, namely industry relatedness between the two firms and technological intensity, on the completion likelihood of cross-border M&A deals. Based on a sample of 8,489 M&A transactions we found that the completion likelihood of cross-border M&As increases with spatial distance. The effect is more pronounced for deals across technology-based industries, evidence for related deals is inconclusive.
The authors investigate the pre-merger process, defined as the period between the announcement and completion of an M&A (mergers and acquisitions) deal. Specifically, the…
The authors investigate the pre-merger process, defined as the period between the announcement and completion of an M&A (mergers and acquisitions) deal. Specifically, the authors examine if the timing of the announcement in a merger wave affects whether or not the M&A deal is completed, and how long this pre-merger process takes. The authors conduct a textual analysis of the 150 largest abandoned M&A deals in the sample. From this, the authors find that competing bidders, regulatory concerns, and shareholder opposition from the acquirer are major roadblocks in the pre-merger process, and that these hurdles often occur jointly. Subsequently, the authors examine a sample of 2,802 announced M&As across four industry waves and find that M&A deals initiated earlier in a merger wave are more likely to be completed and are completed more speedily.
This study investigates the effect of national champion strategies on the length of the pre-M&A process in Europe. The policy strategy of creating so-called “national…
This study investigates the effect of national champion strategies on the length of the pre-M&A process in Europe. The policy strategy of creating so-called “national champions,” that is, promoting national rather than international mergers, is often the focus of European policy debate. If European governments support national champion M&A activities, we would expect that national champion M&A deals have an accelerated pre-M&A process at the European Commission (EU) relative to comparable European M&A deals. To empirically test this proposition, we compare national champion M&A under scrutiny by the EU to similar deals in terms of industry and firm characteristics in the period 1997–2010. In contrast to our expectation, national champion M&As face a longer pre-M&A process than other comparable European M&As. However, evidence indicates that national champion M&As are almost always completed successfully while comparable European M&As are often derailed in process.
Current publication practices in the scholarly (International) Business and Management community are overwhelmingly anti-Popperian, which fundamentally frustrates the…
Current publication practices in the scholarly (International) Business and Management community are overwhelmingly anti-Popperian, which fundamentally frustrates the production of scientific progress. This is the result of at least five related biases: the verification, novelty, normal science, evidence, and market biases. As a result, no one is really interested in replicating anything. In this essay, the author extensively argues what he believes is wrong, why that is so, and what we might do about this. The paper aims to discuss these issues.
This is an essay, combining a literature review with polemic argumentation.
Only a tiny fraction of published studies involve a replication effort. Moreover, journal authors, editors, reviewers and readers are not interested in seeing nulls and negatives in print. This replication crisis implies that Popper’s critical falsification principle is actually thrown into the scientific community’s dustbin. Behind the façade of all these so-called new discoveries, false positives abound, as do questionable research practices meant to produce all this allegedly cutting-edge and groundbreaking significant findings. If this dismal state of affairs does not change for the good, (International) Business and Management research is ending up in a deadlock.
A radical cultural change in the scientific community, including (International) Business and Management, is badly needed. It should be in the community’s DNA to engage in the quest for the “truth” – nothing more, nothing less. Such a change must involve all stakeholders: scholars, editors, reviewers, and students, but also funding agencies, research institutes, university presidents, faculty deans, department chairs, journalists, policymakers, and publishers. In the words of Ioannidis (2012, p. 647): “Safeguarding scientific principles is not something to be done once and for all. It is a challenge that needs to be met successfully on a daily basis both by single scientists and the whole scientific establishment.”
Publication practices have to change radically. For instance, editorial policies should dispose of their current overly dominant pro-novelty and pro-positives biases, and explicitly encourage the publication of replication studies, including failed and unsuccessful ones that report null and negative findings.
This is an explicit plea to change the way the scientific research community operates, offering a series of concrete recommendations what to do before it is too late.