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Corporate governance transfers: the case of mergers and acquisitions

Tanveer Hussain, Tunyi Tunyi Abongeh Orcid Logo, Jacob Agyemang

International Journal of Disclosure and Governance

Swansea University Author: Tunyi Tunyi Abongeh Orcid Logo

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DOI (Published version): 10.1057/s41310-023-00217-0

Abstract

We study changes in corporate governance around mergers and acquisitions by comparing the ex-post corporate governance of the combined firm with the ex-ante weighted average governance of the bidder and target. We find that when the quality of the bidder governance is better than the target before t...

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Published in: International Journal of Disclosure and Governance
ISSN: 1741-3591 1746-6539
Published: Springer Science and Business Media LLC 2023
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URI: https://cronfa.swan.ac.uk/Record/cronfa65367
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first_indexed 2023-12-21T11:42:17Z
last_indexed 2023-12-21T11:42:17Z
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spelling v2 65367 2023-12-21 Corporate governance transfers: the case of mergers and acquisitions eefe2792c8eed5b49feede33981dfa53 0000-0002-5761-931X Tunyi Tunyi Abongeh Tunyi Tunyi Abongeh true false 2023-12-21 CBAE We study changes in corporate governance around mergers and acquisitions by comparing the ex-post corporate governance of the combined firm with the ex-ante weighted average governance of the bidder and target. We find that when the quality of the bidder governance is better than the target before the acquisition, the ex-post corporate governance quality of the combined firm is better than the ex-ante weighted average of each firm. We document post-acquisition improvement in the combined firm’s board independence, audit committee independence, stock compensation, and minority shareholders protection, proposing that these firm-level attributes serve as potential channels to explain better corporate governance quality of the combined firm. The operating performance of the combined firm also improves when the bidder’s pre-deal governance quality is better than the target. Our results support the portability theory of corporate governance, suggesting that poorly governed targets are better off if acquired by better-governed bidders. Journal Article International Journal of Disclosure and Governance 0 Springer Science and Business Media LLC 1741-3591 1746-6539 Firm corporate governance , Combined firm, Mergers and acquisitions, Portability theory, Operatingperformance 20 12 2023 2023-12-20 10.1057/s41310-023-00217-0 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Another institution paid the OA fee The work is done without any financial support. 2024-06-06T14:39:12.9187917 2023-12-21T11:41:03.1765897 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Tanveer Hussain 1 Tunyi Tunyi Abongeh 0000-0002-5761-931X 2 Jacob Agyemang 3 65367__29806__7fd7ed39f49d4509939176ee0aea23c4.pdf 65367.VOR.pdf 2024-03-22T16:19:44.4332882 Output 863512 application/pdf Version of Record true This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. true eng http://creativecommons.org/licenses/by/4.0/
title Corporate governance transfers: the case of mergers and acquisitions
spellingShingle Corporate governance transfers: the case of mergers and acquisitions
Tunyi Tunyi Abongeh
title_short Corporate governance transfers: the case of mergers and acquisitions
title_full Corporate governance transfers: the case of mergers and acquisitions
title_fullStr Corporate governance transfers: the case of mergers and acquisitions
title_full_unstemmed Corporate governance transfers: the case of mergers and acquisitions
title_sort Corporate governance transfers: the case of mergers and acquisitions
author_id_str_mv eefe2792c8eed5b49feede33981dfa53
author_id_fullname_str_mv eefe2792c8eed5b49feede33981dfa53_***_Tunyi Tunyi Abongeh
author Tunyi Tunyi Abongeh
author2 Tanveer Hussain
Tunyi Tunyi Abongeh
Jacob Agyemang
format Journal article
container_title International Journal of Disclosure and Governance
container_volume 0
publishDate 2023
institution Swansea University
issn 1741-3591
1746-6539
doi_str_mv 10.1057/s41310-023-00217-0
publisher Springer Science and Business Media LLC
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
active_str 0
description We study changes in corporate governance around mergers and acquisitions by comparing the ex-post corporate governance of the combined firm with the ex-ante weighted average governance of the bidder and target. We find that when the quality of the bidder governance is better than the target before the acquisition, the ex-post corporate governance quality of the combined firm is better than the ex-ante weighted average of each firm. We document post-acquisition improvement in the combined firm’s board independence, audit committee independence, stock compensation, and minority shareholders protection, proposing that these firm-level attributes serve as potential channels to explain better corporate governance quality of the combined firm. The operating performance of the combined firm also improves when the bidder’s pre-deal governance quality is better than the target. Our results support the portability theory of corporate governance, suggesting that poorly governed targets are better off if acquired by better-governed bidders.
published_date 2023-12-20T14:39:13Z
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score 11.013731

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