Abstract

https://ssrn.com/abstract=2565451
 


 



Acquiring Organizational Capital


Frank Weikai Li


Hong Kong University of Science and Technology - Department of Finance

Zilong Zhang


City University of Hong Kong

May 1, 2015

Asian Finance Association (AsianFA) 2015 Conference Paper

Abstract:     
Acquisitions of organizational capital produce significant positive gains for acquiring-firm shareholders. Consistent with theories, acquirers benefit more from buying organizational capital when acquirer and target are from related industry, when the deal is stock financed, when target size is large relative to acquirer and when acquirer managers exhibit high ability prior to merger. Acquirers buying high organizational capital targets not only experience higher announcement returns, but also improvement in post-merger operating performance and higher long-run stock returns. Overall, our paper uncovers a new channel where firms can get access to valuable organizational assets and documents it is beneficial for acquirer shareholders.

Number of Pages in PDF File: 40

Keywords: Organizational Capital, Mergers & Acquisitions, Synergy


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Date posted: February 17, 2015 ; Last revised: July 4, 2015

Suggested Citation

Li, Frank Weikai and Zhang, Zilong, Acquiring Organizational Capital (May 1, 2015). Asian Finance Association (AsianFA) 2015 Conference Paper. Available at SSRN: https://ssrn.com/abstract=2565451 or http://dx.doi.org/10.2139/ssrn.2565451

Contact Information

Frank Weikai Li
Hong Kong University of Science and Technology - Department of Finance ( email )
Clear Water Bay
Kowloon
Hong Kong
Zilong Zhang (Contact Author)
City University of Hong Kong ( email )
83 Tat Chee Avenue
Kowloon
Hong Kong
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