Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/81315
Title: Organization capital and mergers and acquisitions
Authors: Li, Kai
Qiu, Buhui
Shen, Rui
Keywords: Labor
DRNTU::Business::Operations management
Capital
Issue Date: 2018
Source: Li, K., Qiu, B., & Shen, R. (2018). Organization Capital and Mergers and Acquisitions. Journal of Financial and Quantitative Analysis, 53(4), 1871-1909. doi:10.1017/S0022109018000145
Series/Report no.: Journal of Financial and Quantitative Analysis
Abstract: Using a sample of completed U.S. acquisition deals over the period 1984–2014, we find that acquirer organization capital as measured by capitalized selling, general, and administrative (SG&A) expenses is associated with superior deal performance. We show that high organization-capital acquirers achieve significantly higher abnormal announcement period returns, and better post-merger operating and stock performance, than low organization-capital acquirers. Additional tests suggest a causal relation between acquirer organization capital and deal performance. We further show that post-merger, high organization-capital acquirers cut more on the cost of goods sold, invest more in SG&A expenses, and achieve greater asset turnover and innovative efficiency.
URI: https://hdl.handle.net/10356/81315
http://hdl.handle.net/10220/47617
ISSN: 0022-1090
DOI: 10.1017/S0022109018000145
Rights: © 2018 Michael G. Foster School of Business, University of Washington. All rights reserved. This paper was published in Journal of Financial and Quantitative Analysis and is made available with permission of Michael G. Foster School of Business, University of Washington.
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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