Journal of Financial Economics Vol. 147 No. 1 2023
Do firms with specialized M&A staff make better acquisitions?
Abstract
We open the black box of the M&A decision process by examining whether specialized M&A staff, who perform a wide range of acquisition-related functions, improve acquisition performance. We find that the presence and the quality of specialized M&A staff is one of the most economically important determinants of acquisition performance. We explore mechanisms through which specialized M&A staff improve acquisition performance and investigate why only less than half of US firms employ such staff. Agency costs are a first-order determinant for specialized M&A staff's value-creation role. Such staff do not improve acquisition performance in firms with heightened agency conflicts.
- DOI
- 10.1016/j.jfineco.2022.09.002
- Volume
- 147
- Issue
- 1
- Pages
- 75-105
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib