Gao, N and Mohamed, A orcid.org/0000-0002-2974-9467 (2018) Cash-rich acquirers do not always make bad acquisitions: New evidence. Journal of Corporate Finance, 50. C. pp. 243-264. ISSN 0929-1199
Abstract
Cash-rich acquirers on average perform better than their cash-poor counterparts. This observation is driven by financially constrained acquirers and by the deals made between the 1990s and 2000s. It is robust to alternative measures of financial constraints, to both the short term and the long term, and to the different institutional setting such as the U.K. We conclude cash richness primarily reflects acquirer managers' private information of deal quality instead of agency costs. The precautionary motive can explain the positive cash holdings effect on acquirer performance.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2018 Elsevier B.V. This is an author produced version of a paper published in the Journal of Corporate Finance. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Cash holdings; Financial constraints; Acquirer performance; Mergers and acquisitions; Financial slack |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 20 Jun 2019 13:30 |
Last Modified: | 07 Feb 2020 14:06 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jcorpfin.2018.04.002 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:147564 |
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