Managerial Ability and Intangible Assets: Evidence From Purchase Price Allocations in Mergers and Acquisitions

Posted: 30 May 2019

See all articles by Shin Hyoung Kwon

Shin Hyoung Kwon

Hanyang University ERICA

Tingting Ye

Boston University - Questrom School of Business

Date Written: February 28, 2019

Abstract

We examine the relationship between managerial ability and recognized intangible assets, including goodwill and other assets acquired in mergers and acquisitions (M&As). We find that managerial ability is positively associated with the amount of intangible assets acquired in M&As. Furthermore, managerial ability affects the purchase price allocation of these assets and is more positively related to goodwill than to other intangible assets. Finally, cross-sectional analyses reveal that the relationship between managerial ability and intangible assets acquired in M&As is mainly driven by acquirers with domestic, public, or related targets, whose information is more easily accessible.

Keywords: Managerial Ability, Intangible Assets, Goodwill, Purchase Price Allocation, Mergers and Acquisitions

JEL Classification: G18, G34, M41

Suggested Citation

Kwon, Shin Hyoung and Ye, Tingting, Managerial Ability and Intangible Assets: Evidence From Purchase Price Allocations in Mergers and Acquisitions (February 28, 2019). Boston University Questrom School of Business Research Paper No. 3384449. Available at SSRN: https://ssrn.com/abstract=3384449 or http://dx.doi.org/10.2139/ssrn.3384449

Shin Hyoung Kwon (Contact Author)

Hanyang University ERICA ( email )

55 Hanyangdaehak-ro, Sangnok-gu
Ansan, Gyeonggi-do 15588
Korea, Republic of (South Korea)

Tingting Ye

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

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