47 Pages Posted: 22 Apr 2008 Last revised: 8 Sep 2009
Date Written: August 2008
This paper examines whether the gender of CEOs or corporate directors plays a role in the pricing of and returns on mergers and acquisitions. We show that the bid premium over the pre-announcement target share price is statistically and economically smaller if the CEO of the bidding company is a woman: ceteris paribus, the bid premium is reduced by over 70 percent. Also, the bid premium is statistically and economically smaller the larger is the proportion of women on the target company's board, provided that the female directors are independent appointees: each ten-percent of independent female directors on the target board reduces the bid premium by approximately 15 percent. The strong effects of gender on the bid premium are reinforced by substantially smaller target cumulative abnormal announcement period returns. The CEO gender effects are robust to the use of an alternative sample.
Keywords: bid premium, CEO and director gender, cumulative abnormal announcement period return, independent versus inside female directors, mergers and acquisitions
JEL Classification: G34
Suggested Citation: Suggested Citation
Levi, Maurice D. and Li, Kai and Zhang, Feng, Mergers and Acquisitions: The Role of Gender (August 2008). Available at SSRN: https://ssrn.com/abstract=1123735 or http://dx.doi.org/10.2139/ssrn.1123735