Resource complementarity and value capture in firm acquisitions: The role of intellectual property rights

Extant literature holds that firm acquisitions create value through innovation if the knowledge bases of the acquirer and the target complement each other. Little is known about the value that patents associated with a target's knowledge convey to the acquirer, i.e., their value in securing market exclusion and freedom to operate in R&D. We argue that such property rights hold preemptive power allowing firms to capture the value from combining complementary technologies and to realize gains from trade in strategic factor markets. Our results for a sample of 1,428 acquisitions indicate that—controlling for technological value—acquired preemptive power is an important determinant of the acquisition price, particularly when the acquirer is technology intensive and acquired patents are highly related to the acquirer's knowledge base. Copyright © 2013 John Wiley & Sons, Ltd.     

Technological overlap,technological capabilities,and resource recombination in technological acquisitions

The performance of technological acquisitions depends heavily on the overlap between the knowledge bases of the target and acquirer. We argue that overlap is best viewed as two distinct constructs: target overlap, the proportion of the target's knowledge base that the acquirer already possesses, and acquirer overlap, the proportion of the acquirer's knowledge base duplicated by the target. Each affects the value created from the firms' technological capabilities differently due to absorptive capacity, knowledge redundancy, and organizational disruption. Further, the low quantity of innovations observed in acquisitions with low target overlap may conceal an offsetting increase in their novelty. Copyright © 2013 John Wiley & Sons, Ltd.     

Acquisitions of private vs. public firms: Private information,target selection,and acquirer returns

The acquisition of privately held firms is a prevalent phenomenon that has received little attention in mergers and acquisitions research. In this study, we examine three questions: (1) What drives the acquirer's choice between public and private targets? (2) Do acquisitions of private targets elicit a more positive stock market reaction than acquisitions of public targets, which, on average, destroy value for acquirers' shareholders? (3) Do acquirers gain when their selection of a public or private target fits the theory? In this paper, we argue that the lack of information on private targets limits the breadth of the acquirer's search and increases its risk of not evaluating properly the assets of private targets. At the same time, less information on private targets creates more value‐creating opportunities for exploiting private information, whereas the market of corporate control for public targets already serves as an information‐processing and asset valuation mechanism for all potential bidders. Using an event study and survey data, we find that: (1) acquirers favor private targets in familiar industries and turn to public targets to enter new business domains or industries with a high level of intangible assets; (2) acquirers of private targets perform better than acquirers of public targets on merger announcement, after controlling for endogeneity bias; (3) acquirers of private firms perform better than if they had acquired a public firm, and acquirers of public firms perform better than if they had acquired a private firm. These results support the expectation that acquirer returns from their target choice (private/public) are not universal but depend on the acquirer's type of search and on the merging firms' attributes. Copyright © 2007 John Wiley & Sons, Ltd.     

When the target may know better: Effects of experience and information asymmetries on value from mergers and acquisitions

Research summary : Extending research on the effect of experience on acquisition outcomes, we examine how the differential in previous M&A experience between the target and the acquirer affects the value they, respectively, obtain when the acquirer takes over the target. Drawing on literature about organizational learning, negotiation, and information economics, we theorize that the party with greater experience will be able to obtain more value. Furthermore, we theorize that the effect of differential M&A experience on value obtained is contingent on the level of information asymmetry the acquirer faces with respect to the target, specifically as a function of the target's product‐market scope and whether the deal is friendly. We test and find support for these predictions in a sample of 1,241 M&As over a 30‐year period. Managerial summary : Corporate strategy is about a firm's scope and development decisions and outcomes, but corporate strategizing is incomplete unless managers anticipate the moves of other economic actors. We demonstrate the importance of these points when it comes to learning to make acquisitions. Using an innovative research design and theory that enables comparison between acquirer and target gains, we show that whatever their firm's acquisition history and capabilities, acquisitive managers should mind the negotiation and other pitfalls that arise when target firms possess ample acquisition experience of their own. We also demonstrate that the effect of experience advantage, whereby the more experienced party benefits, depends on the target firm's scope and whether the deal is friendly—two dimensions that acquirers can and should take into account. Copyright © 2016 John Wiley & Sons, Ltd.     

Owners on both sides of the deal: mergers and acquisitions and overlapping institutional ownership

Using a corporate governance lens, this study considers owners with a stake in both the acquiring and the target firms in the context of mergers and acquisitions. A possible agency problem arises with regard to monitoring implications as managers may be able to take advantage of compromised monitoring because overlapping owners may focus on the aggregate value for both the acquiring and the target firms and nonoverlapping owners may be interested only in the acquirer's side of the deal. The results suggest that when more owners overlap in their ownership of both the acquiring and target firms, the acquiring firms are more likely to experience decreased shareholder value through merger and acquisition deals. This effect, however, can be constrained by stronger board control. Copyright © 2010 John Wiley & Sons, Ltd.     

Interorganizational Imitation and Acquisitions of High‐tech Ventures

Research summary: This article shows that there is a positive association between the changes in the number of prior acquisitions or the changes in the prominence of prior acquirers within the focal venture's subfield and the venture's likelihood to be acquired. Results are in line with the existence of frequency‐ and trait‐based imitation in acquisitions targeting tech ventures. More importantly, these positive associations are more pronounced when (a) exogenous technological uncertainty within the venture's subfield increases and (b) there are significant differences between the focal venture's and acquirer's technological resources. Our findings are in accord with the suggestion that uncertainty in the technology domain is an important boundary condition in moderating the extent of imitation in technology acquisitions. We also discuss alternative explanations and implications. Managerial summary: The findings of this article suggest that when deciding whether or not to acquire a technology venture (i.e., startup company in a high‐tech industry), managers infer information by observing other acquisitions in the venture's subfield to make assessments about the underlying value of the potential targets. We also find that receiving some informational cues from previous acquisitions would be more useful when there is high technological uncertainty in the potential target's subfield about which technologies will be dominant, and when the potential acquirer and the tech venture operate in dissimilar technological areas. This article shows that imitation can be one way to deal with decision‐making under uncertainty when making acquisition decisions in high‐tech environments. Copyright © 2017 John Wiley & Sons, Ltd.     

A clash of governance logics: Foreign ownership and board monitoring

We ask whether and when shareholder‐oriented foreign owners are likely to change corporate governance logics in a stakeholder‐oriented setting by introducing shareholder‐oriented governance practices. We focus on board monitoring and claim that because the bundle of practices used in a stakeholder context does not protect shareholder‐oriented foreign owners' interests, they seek to introduce their own practices. Our results suggest that board monitoring is only activated when shareholder‐oriented foreign ownership is high and that the influence of foreign ownership is especially strong in firms without large domestic owners, with high levels of risk and poor performance. Our findings uncover the possibility of the co‐existence of different corporate governance logics within a given country, shaped by the nature and weight of foreign owners Copyright © 2014 John Wiley & Sons, Ltd.     

资本结构、债权治理与公司绩效:一项经验分析

公司债权的治理作用与公司绩效之间存在着密切的逻辑联系。应将不同的制度因素与一国企业的独有特征作为解释债权治理效用的初始条件。经验分析表明：中国上市公司的资本结构存在着诸多不合理的特征，债权治理表现出无效性。政府部门应大力完善债权人行权的制度环境；深化国有商业银行的公司公改造，打造独立的债权主体；加快发展企业债券市场并加大培育机构投资者的力度；允许银行对企业进行战略性特股并完善主办银行制度。     

Who does private equity buy? Evidence on the role of private equity from buyouts of divested businesses

Research Summary: We examine the role of nonventure private equity firms in the market for divested businesses, comparing targets bought by such firms to those bought by corporate acquirers. We argue that a combination of vigilant monitoring, high‐powered incentives, patient capital, and business independence makes private equity firms uniquely suited to correcting underinvestment problems in public corporations, and that they will therefore systematically target divested businesses that are outside their parents’ core area, whose rivals invest more in long‐term strategic assets than their parents, and whose parents have weak managerial incentives both overall and at the divisional level. Results from a sample of 1,711 divestments confirm these predictions. Our study contributes to our understanding of private equity ownership, highlighting its advantage as an alternate governance form. Managerial Summary: Private equity firms are often portrayed as destroyers of corporate value, raiding established companies in pursuit of short‐term gain. In contrast, we argue that private equity investors help to revitalize businesses by enabling investments in long‐term strategic resources and capabilities that they are better able to evaluate, monitor, and support than public market investors. Consistent with these arguments, we find that when acquiring businesses divested by public corporations, private equity firms are more likely to buy units outside the parent's core area, those whose peers invest more in R&D than their parents, and those whose parents have weak managerial incentives, especially at the divisional level. Thus, private equity firms systematically target those businesses that may fail to realize their full potential under public ownership.     

Productivity enhancement at home via cross‐border acquisitions: The roles of learning and contemporaneous domestic investments

We examine whether ex post domestic productivity gains accrue to firms making cross‐border acquisitions. We argue that cross‐border acquisitions can enhance the acquirers' productivity at home, and we posit that these domestic productivity gains will be greater when there are learning opportunities in the target's host country and when contemporaneous domestic productivity‐enhancing investments are made by the acquirer in conjunction with the acquisition. These predictions are supported by data drawn from a sample of French acquiring and nonacquiring firms. Our results indicate that cross‐border acquisitions and investing in productivity at home are complementary: each makes the other more beneficial to firm productivity. Copyright © 2014 John Wiley & Sons, Ltd.     

Corporate governance antecedents to shareholder activism: A zero‐inflated process

Research summary: Shareholder activism has become more widespread, yet the role of corporate governance as antecedent to shareholder activism remains equivocal. We propose a new conceptual model that characterizes the stochastic of observable shareholder activism as a compound product of two latent components representing (1) shareholder activists' propensity to target a company and (2) executives' propensity to settle activists' demands privately. Our model explicitly decouples corporate governance expectations for the two latent components embedded in activism process, and thus allows us to relax assumptions of homogenous shareholder interests and constrained managerial discretion where corporate managers are expected to negotiate privately and settle only value‐creating activist demands. Bayesian analysis of zero‐inflated Poisson regression reveals that corporate governance relationships with activism vary across shareholder demands and private settlements. Managerial summary: Increasing shareholder activism has generated debates as to whether activism promotes managerial accountability and responsibility or instead encourages managerial short‐termism. Our research model allows for heterogeneous interests among a company's shareholders. We theorize and empirically investigate a broader role of corporate governance: governance mechanisms need to ensure that executives are not (1) ignoring activists' value‐increasing demands or (2) accommodating activists' value‐decreasing demands in a private, opaque manner that disenfranchises other shareholders. Our results indicate that corporate governance implications differ for visible shareholder demands in contrast with private activism. A plausible application of our model is that it provides estimates of the probability of the numbers of shareholder demands to be received by a firm and the probability of privately settling a demand. Copyright © 2015 John Wiley & Sons, Ltd.     

软件企业R＆D治理边界与结构

软件企业R&D人力资本价值升值及其产权的认可与实现,导致传统的公司治理活动由企业高层向下延伸到了企业的R&D活动中。本文通过探讨“公司治理”的本质及其与“公司经营管理”的区别,较为科学地界定了软件企业R&D治理的概念及其内涵,提出并论证了软件企业R&D治理的边界,在此基础之上,初步构造了软件企业R&D治理的结构要素,并对其进行了特征分析。     

国企改制：基于治理与管理内涵职能的深化分析

公司治理是公司“依法管理”的重要体现。它为维护所有者权益和公司各利益主体间的权益制衡从而规范化行使其权能，为公司外向型决策机制的形成和市场化战略营运发展亦即企业家的选拔造就提供了必要的体制保障。作为公司治理战略意向实现方式的公司管理。在实际上成为企业家才能或企业家精神导向下的管理创新过程中。反过来又有力推动公司治理和战略构想的创新发展。从公司治理与公司管理内涵职能深化分析的视角，考察我国国企改制现实，可看到当前国资管理中“国资委模式”，存在诸多应予以关注的问题。     

Choice and performance of governance mechanisms: matching alliance governance to asset type

Formal and relational governance mechanisms are used in strategic alliances to coordinate resources and mitigate the risk of opportunistic behavior. While recent work has shown that these approaches are not mutually exclusive, we understand little about when one approach is superior to the other. Using data on the governance choices and subsequent performance of alliances in the German telecommunications industry, we find that the optimal configuration of formal and relational governance mechanisms depends on the assets involved in an alliance, with formal mechanisms best suited to property‐based assets and relational governance best suited to knowledge‐based assets. Furthermore, a mismatch between governance mechanisms and asset type can harm the performance of the alliance. Our findings contribute to transaction cost economics, the literature on relational governance, and recent work studying their interaction. Copyright © 2009 John Wiley & Sons, Ltd.     

Antecedents and consequences of corporate governance reform: the case of Germany

The paper examines the antecedents and consequences of the voluntary adoption of corporate governance reform in firms embedded in a relationship‐based governance system with less protection of minority shareholders. In such locations, ownership structure should be a key determinant of governance reform. Firms with dispersed ownership are likely to face agency problems but may lack sufficient ownership power in the hand of external owners for adoption to occur. Extensive ownership by external parties facilitates adoption but decreases the need and motivation to adopt governance reform. We examined the adoption of stock‐based incentive plans and transparent accounting regulations (e.g., greater disclosure to shareholders) among large German firms (DAX 100) during the late 1990s. We found an inverse ‘U’‐shaped relationship between ownership concentration and governance reform. In addition, we found that firms adopting governance reform were more likely to engage in corporate divestitures and achieve higher levels of market performance than firms not adopting governance reform. Copyright © 2003 John Wiley & Sons, Ltd.     

On the role of acquisition premium in acquisition research

Several studies argue that paying high acquisition premia is value destroying for acquirer shareholders. There are studies that have even used the size of premium as a measure of low‐quality decision making. This paper departs from the earlier research and shows that acquisition premia may be justified when target firms' resources are difficult for the market to value. An analysis of a sample of 458 acquisitions demonstrates that although higher premia are paid for R&D‐related assets, the premia do not cause negative abnormal returns. Abnormal returns are more strongly affected by the overall target price levels independent of premia. Copyright © 2007 John Wiley & Sons, Ltd.     

How do country‐level governance characteristics impact the relationship between R&D and firm value?

This article addresses the question of how country‐level governance characteristics moderate the market valuation of research and development (R&D). Using a valuation model and panel data from companies in the European Union, United States, and Japan, we find that effective corporate governance allows the market to better assess a firm's R&D investments. This finding is the conjunction with the effect of the legal system, the financial system, and mechanisms of control. First, as effectiveness of investor protection increases, the market valuation of R&D projects also increases. Second, more developed financial systems do a better job assessing R&D. Third, effective control mechanisms reinforce the positive effect of R&D on a firm's market value. In sum, our findings shed light on how policymakers can increase the benefits from firms' R&D spending and thus foster economic growth and social welfare using these country‐level governance characteristics.     

Geographic overlap and acquisition pairing

Research Summary: This study examines the role of geographic factors in explaining acquisition pairing using a novel conditional logic methodology. Drawing from information asymmetry arguments regarding acquisition decisions, we theorize that geographic overlap between the acquirer and potential targets’ businesses and operations enables the acquirer to collect more information about the potential target through its multiple business operations that are geographically proximate. We also demonstrate moderating boundary conditions. In particular, we examine acquiring firm characteristics, acquiring firm size and geographic dispersion, which both weaken the relationship between geographic overlap and acquisition pairing. Likewise, we examine two dyadic distance moderators, geographic distance and product dissimilarity, both of which increase information asymmetry between the acquirer and potential targets, which increases the effect of geographic overlap in facilitating acquisition pairing. Managerial Summary: Firms pursuing acquisition activities face severe information asymmetry when evaluating potential targets. This study investigates how acquiring firms leverage geographic conditions to overcome information asymmetry and choose targets that they can better evaluate. We find that acquirers are more likely to choose targets that have subsidiaries or business operations overlapping in the same states as the acquirers themselves. This is particularly true for small acquirers, which lack resources and capabilities to seek external assistance, and acquirers that have business operations in more concentrated locations. We also find that acquiring targets with geographically overlapped business operations is especially salient when the target's headquarters is distantly located from the acquirer or when the target offers dissimilar products from the acquirer.     

With greater power comes greater responsibility? takeover protection and corporate attention to stakeholders

Using takeover protection as an indicator of corporate governance, this study examines how an exogenous shift in power from shareholders to managers affects corporate attention to non‐shareholding stakeholders. Two competing hypotheses are entertained. The shareholder view predicts that stronger takeover protection will lead to a decrease in corporate attention to shareholders and non‐shareholding stakeholders alike, as managers divert resources from shareholders to the pursuit of their private interests. The stakeholder view, in contrast, predicts that stronger takeover protection will increase corporate attention to non‐shareholding stakeholders. Because catering to non‐shareholding stakeholders contributes to the long‐term value of the firm, managers will be more likely to attend to those stakeholders when relieved from short‐termism triggered by the threat of hostile takeovers. Using a sample of 878 U.S. firms from 1991 to 2002, the study finds that an exogenous increase in takeover protection leads to higher corporate attention to community and the natural environment, but has no impact on corporate attention to employees, minorities, and customers. Additional analyses show that firms that increase their attention to stakeholders experience an increase in long‐term shareholder value. These findings provide additional evidence that relief from short‐termism is a likely source of the increase in corporate attention to non‐shareholding stakeholders following the increase in takeover protection. Copyright © 2008 John Wiley & Sons, Ltd.     

债务融资治理效应对两权分离的影响——基于我国上市公司数据

以2005年-2009年的上市公司为样本,研究了负债融资与两权分离之间的关系,研究结果表明:我国上市公司的负债融资能够抑制过度投资行为、降低公司代理人成本。由于该结论是基于财务杠杆作为唯一治理变量得出的,使其对于债务融资治理低效率的原因解释不够充分。今后应重视债权与股权治理的互动关系以及财务杠杆的内生性等问题的研究。