Managerial Ability and Intangible Assets: Evidence From Purchase Price Allocations in Mergers and Acquisitions
39 Pages Posted: 30 May 2019 Last revised: 7 Jul 2020
Date Written: February 28, 2019
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: Suggested Citation