USF St. Petersburg campus Faculty Publications
The wealth effects of board composition and ownership structure in international acquisitions.
Document Type
Article
Publication Date
2001
ISBN
9781849500746
Abstract
This paper examines the association between board composition, ownership structure, and the shareholder wealth of bidding U.S. firms in international acquisitions. Foreign acquisitions represent major investment proposals that demand the involvement of the board in the decision-making process. Hence, the international acquisition process provides a good vehicle to examine the efficacy of the board of directors. Consistent with other studies, our results indicate that U.S. bidders experience significant negative wealth effects at the announcement of the acquisition. In addition, we find that wealth effects are significantly and positively related to board size and to share ownership by independent outside directors and inside directors. Sub-samples based on board size reveal that for small boards, share ownership by directors is significantly related to abnormal returns only for insider dominated boards. For large boards, ownership by independent outside directors is significantly related to abnormal returns only for outsider dominated boards.
Language
en_US
Publisher
Emerald Group Publishing Ltd.
Recommended Citation
Sundaram, S., Chhachhi, I. & Rosenstein, S. (2001). The wealth effects of board composition and ownership structure in international acquisitions. In M. Hirschey, K. John & A. Makhija (Eds.), Advances in Financial Economics vol. 6, (pp: 209-221). Bingley: Emerald Group Publishing Limited.
Creative Commons License
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