SSRN Home Search and Download Papers Browse Abstract and Paper Submission Subscribe to Networks View Briefcase Top Papers Top Authors Top Institutions

 

Abstract

 


 



When do Buyers and Targets Draw on Related Resources? A Test of Between-firm Measures of Industry Relatedness in Acquisitions

Russell W. Coff
Goizueta Business School, Emory University

Donald E. Hatfield
Virginia Polytechnic Institute


July 1996


Abstract:     
The received view is that related acquisitions have more potential to create value than unrelated acquisitions. However, there are very few measures of relatedness between two firms. Existing measures are very crude relative to those used in diversification research (e.g., diversity of a single firm's portfolio). In addition, they do not reflect recent advances in resource-based theory. Relatedness is critical in acquisitions because it may indicate asymmetric information as well as buyer objectives. These, in turn, are factors that investors may respond to when an offer is announced. We develop and test between-firm relatedness measures based on products, technology, and human expertise. While all measures had some predictive validity, the expertise measure was slightly better at predicting investor response.

JEL Classifications: G34, G12, G14

Working Paper Series

Date posted: June 16, 1997 ; Last revised: December 02, 1997

Suggested Citation

Coff, Russell W. and Hatfield, Donald E., When do Buyers and Targets Draw on Related Resources? A Test of Between-firm Measures of Industry Relatedness in Acquisitions (July 1996). Available at SSRN: http://ssrn.com/abstract=8371


Export to: Export Citation What's this?

Contact Information

Russell W. Coff (Contact Author)
Goizueta Business School, Emory University ( email )
1300 Clifton Road
Atlanta, GA 30322
United States
404-727-0526 (Phone)
404-727-6313 (Fax)
HOME PAGE: http://www.bus.emory.edu/rcoff/Research.html
Donald E. Hatfield
Virginia Polytechnic Institute ( email )
Blacksburg, VA 24061
United States
Feedback to SSRN (Beta)


Paper statistics
Abstract Views: 474
Downloads: 0

© 2010 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright
This page was served by apollo1 in 0.125 seconds.