Panayi, E, Bozos, K orcid.org/0000-0003-2914-6495 and Veronesi, G (2021) Corporate Governance “Bundles” and Firm Acquisitiveness. Corporate Governance, 29 (4). pp. 402-426. ISSN 0964-8410
Abstract
Research Question/Issue
We explore how the interrelations of governance mechanisms (“bundles”) influence a firm's propensity for corporate acquisitions. Focusing on four key internal and external mechanisms, namely, board of directors monitoring, CEO pay incentives, takeover market discipline, and institutional investor monitoring, we use a sample of 1171 completed M&A deals by 799 U.S. firms during the period 1998–2015 to test the Substitution versus Complementarity Hypotheses.
Research Findings/Insights
The findings provide, in the main, support for both the Substitution and the Complementarity Hypotheses, with several incentives alignment, internal and external monitoring mechanisms acting as substitutes and complements of each other toward firm acquisitiveness.
Theoretical/Academic Implications
Our results challenge the notion that corporate governance mechanisms purely function as independent factors and contribute to the configurational perspective of corporate governance. They offer new evidence that combinations or “bundles” of firm-level governance mechanisms can allow for differing degrees of firm acquisitiveness.
Practitioner/Policy Implications
Different governance “bundles” will have different implications for major strategic decisions such as corporate acquisitions. Firms seeking to control or increase acquisition propensity can thus consider “equifinal” governance configurations, whereby alternative combinations of governance mechanisms can lead to comparable, desired outcomes.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 The Authors. This is an open access article under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0) (https://creativecommons.org/licenses/by/4.0/) |
Keywords: | Corporate governance; acquisitions; substitution; complementarity; governance bundles; configurational perspective |
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: | 08 Mar 2021 15:35 |
Last Modified: | 10 Sep 2021 14:57 |
Status: | Published |
Publisher: | Wiley |
Identification Number: | 10.1111/corg.12371 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:171875 |