Conflicts of interests among shareholders: the case of corporate acquisitions
We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders' portfolios, shareholders with heterogeneous portfolios may disagree about whether to proceed. This...
Gespeichert in:
| Hauptverfasser: | , , |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2007
|
| Schriftenreihe: | Working paper series / National Bureau of Economic Research
13274 |
| Online-Zugang: | Volltext |
| Zusammenfassung: | We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders' portfolios, shareholders with heterogeneous portfolios may disagree about whether to proceed. This effect is measurable and potentially large in the case of corporate acquisitions, where bidder shareholders with holdings in the target want management to maximize a weighted average of both firms' equity values. Empirically, we show that such cross-holdings are large for a significant group of institutional shareholders in the average acquisition and for a majority of institutional shareholders in a significant number of deals. We find evidence that managers consider cross-holdings when identifying potential targets and that they trade off cross-holdings with synergies when selecting them. Overall, we conclude that conflicts of interests among shareholders are sizeable and, at least in the case of acquisitions, affect managerial decisions. |
| Beschreibung: | Literaturverz. S. 27 - 29 |
| Beschreibung: | 47 S. graph. Darst. 22 cm |
Internformat
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| 490 | 1 | |a Working paper series / National Bureau of Economic Research |v 13274 | |
| 500 | |a Literaturverz. S. 27 - 29 | ||
| 520 | 8 | |a We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders' portfolios, shareholders with heterogeneous portfolios may disagree about whether to proceed. This effect is measurable and potentially large in the case of corporate acquisitions, where bidder shareholders with holdings in the target want management to maximize a weighted average of both firms' equity values. Empirically, we show that such cross-holdings are large for a significant group of institutional shareholders in the average acquisition and for a majority of institutional shareholders in a significant number of deals. We find evidence that managers consider cross-holdings when identifying potential targets and that they trade off cross-holdings with synergies when selecting them. Overall, we conclude that conflicts of interests among shareholders are sizeable and, at least in the case of acquisitions, affect managerial decisions. | |
| 700 | 1 | |a Jenter, Dirk |e Verfasser |0 (DE-588)130562351 |4 aut | |
| 700 | 1 | |a Li, Kai |e Verfasser |0 (DE-588)133564355 |4 aut | |
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| illustrated | Illustrated |
| index_date | 2024-07-02T22:41:31Z |
| indexdate | 2024-07-09T21:25:14Z |
| institution | BVB |
| language | English |
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| physical | 47 S. graph. Darst. 22 cm |
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| spelling | Harford, Jarrad V. T. Verfasser (DE-588)13354396X aut Conflicts of interests among shareholders the case of corporate acquisitions Jarrad Harford ; Dirk Jenter ; Kai Li Cambridge, Mass. National Bureau of Economic Research 2007 47 S. graph. Darst. 22 cm txt rdacontent n rdamedia nc rdacarrier Working paper series / National Bureau of Economic Research 13274 Literaturverz. S. 27 - 29 We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders' portfolios, shareholders with heterogeneous portfolios may disagree about whether to proceed. This effect is measurable and potentially large in the case of corporate acquisitions, where bidder shareholders with holdings in the target want management to maximize a weighted average of both firms' equity values. Empirically, we show that such cross-holdings are large for a significant group of institutional shareholders in the average acquisition and for a majority of institutional shareholders in a significant number of deals. We find evidence that managers consider cross-holdings when identifying potential targets and that they trade off cross-holdings with synergies when selecting them. Overall, we conclude that conflicts of interests among shareholders are sizeable and, at least in the case of acquisitions, affect managerial decisions. Jenter, Dirk Verfasser (DE-588)130562351 aut Li, Kai Verfasser (DE-588)133564355 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.> NBER working paper series 13274 (DE-604)BV002801238 13274 http://papers.nber.org/papers/w13274.pdf kostenfrei Volltext |
| spellingShingle | Harford, Jarrad V. T. Jenter, Dirk Li, Kai Conflicts of interests among shareholders the case of corporate acquisitions |
| title | Conflicts of interests among shareholders the case of corporate acquisitions |
| title_auth | Conflicts of interests among shareholders the case of corporate acquisitions |
| title_exact_search | Conflicts of interests among shareholders the case of corporate acquisitions |
| title_exact_search_txtP | Conflicts of interests among shareholders the case of corporate acquisitions |
| title_full | Conflicts of interests among shareholders the case of corporate acquisitions Jarrad Harford ; Dirk Jenter ; Kai Li |
| title_fullStr | Conflicts of interests among shareholders the case of corporate acquisitions Jarrad Harford ; Dirk Jenter ; Kai Li |
| title_full_unstemmed | Conflicts of interests among shareholders the case of corporate acquisitions Jarrad Harford ; Dirk Jenter ; Kai Li |
| title_short | Conflicts of interests among shareholders |
| title_sort | conflicts of interests among shareholders the case of corporate acquisitions |
| title_sub | the case of corporate acquisitions |
| url | http://papers.nber.org/papers/w13274.pdf |
| volume_link | (DE-604)BV002801238 |
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