When Do CEOs Delegate Authority? Evidence from Mergers and Acquisitions

54 Pages Posted: 2 Jul 2016 Last revised: 26 Jan 2018

See all articles by Daniel Greene

Daniel Greene

Clemson University

Jared D. Smith

North Carolina State University - Poole College of Management

Date Written: January 25, 2018

Abstract

We test theoretical predictions on when CEOs delegate authority to senior managers in mergers and acquisitions. Using a novel proxy for delegation, we find that CEOs are more likely to delegate when the firm is larger or more complex and are less likely to delegate when they have an informational advantage or have stronger incentives. Using CEO fixed effects models, we find that delegation is not a strict CEO policy, but is determined partly by deal-specific characteristics. We find that delegated deals close faster than non-delegated deals. Finally, we provide new evidence on the roles of senior managers in acquisitions.

Keywords: Delegation, Mergers and Acquisitions, Executives

JEL Classification: G30, G34, L22, M51

Suggested Citation

Greene, Daniel and Smith, Jared D., When Do CEOs Delegate Authority? Evidence from Mergers and Acquisitions (January 25, 2018). Available at SSRN: https://ssrn.com/abstract=2802623 or http://dx.doi.org/10.2139/ssrn.2802623

Daniel Greene (Contact Author)

Clemson University ( email )

101 Sikes Ave
Clemson, SC 29634
United States

Jared D. Smith

North Carolina State University - Poole College of Management ( email )

Nelson Hall
Raleigh, NC 27695-8614
United States

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