Session 353

Behavioral Foundations of Mergers & Acquisitions

Track P

Date: Monday, September 22, 2014


Time: 14:45 – 16:00


Room: Estancia 307

Session Chair:

  • Shayne Gary, University of New South Wales

Title: Cross-Border Megadeals and Foregin Direct Investment: A Socio-Cognitive Approach


  • Weilei Shi, City University of New York
  • Ravi Madhavan, University of Pittsburgh
  • Eunjoo Yi, University of Pittsburgh

Abstract: Adopting a socio-cognitive lens, we propose that “mega” cross-border M&A deals (of over a billion dollars) will have a greater influence on participating nations’ subsequent foreign direct investment (FDI) outflows, as compared to smaller deals. Such megadeals, by virtue of their size and visibility, will attract FDI decision makers’ attention and serve as initiating forces that shape subsequent FDI efforts. The hypothesis that nations participating in cross-border megadeals will experience higher FDI outflows in subsequent years finds support in data on cross-border megadeals, with Dominance Analysis confirming the significantly greater impact of Megadeals.

Title: Examining Employee and Organisational Outcomes in Mergers and Acquisitions


  • Shayne Gary, University of New South Wales
  • Alannah Rafferty, University of New South Wales

Abstract: This paper examines the factors that drive post-acquisition organizational and employee outcomes. There is wide variation in M&A outcomes at both the organisational and individual employee levels. Some organisations capture substantial financial value through M&A, while others destroy value through damaging employee well-being and reducing organisational capabilities as high performing individuals leave the company. Both strategic management and change management factors are key drivers of M&A outcomes. However researchers have not considered the joint effects of these two divergent research threads when examining post-acquisition success or failure. As a result, researchers have an under-developed understanding of the factors that drive M&A outcomes. We propose a multi-level model of the combined effects of factors from these two literatures on organizational and employee M&A outcomes.

Title: The Price of Fame: The Role of Firm Celebrity in the Merger and Acquisition Process


  • Abbie Oliver, University of Georgia

Abstract: In this study, I take a behavioral approach to understanding acquisition premiums, not only as indicators of the economic value of the target firm, but also as a product of social, human, and interpretative processes. Specifically, I will focus on how firm celebrity impacts the CEO’s decision pertaining to premiums. I integrate the affect infusion model with the literature around social assets and mergers and acquisitions to explain why acquiring firms pay more for firms with celebrity. I plan to test my ideas on a sample of publicly traded acquisitions in the United States over the period 1994 to 2010.

Title: Who is the Cleanest of Them All? The Case of Stigma Emergence in the Context of Reverse Mergers


  • Ivana Naumovska, Northwestern University
  • Jochem Kroezen, Erasmus University - Rotterdam
  • Pursey Heugens, Erasmus University-Rotterdam

Abstract: In this study, we examine factors associated with the decision to merge with firms from stigmatized categories. Specifically, we study reverse mergers (RMs), in which a private company goes public by merging with a public shell company that exists largely in public status only. We advance a theoretical framework, which suggests that shell companies from stigmatized categories are less likely to be consummated in a RM, and this effect is moderated by the stigmatization of the RM practice, and its economic value. We apply and test our framework with an extensive data on the adoption of RMs and the choice of shell companies, in the period 2001-2012. In doing so, we seek to contribute to the literature on stigma by association, and to the growing literature on social constructions in financial markets.

All Sessions in Track P...

Sun: 08:00 – 09:15
Session 459: Theoretical Foundations of Behavioral Strategy I
Sun: 09:30 – 10:45
Session 460: Theoretical Foundations of Behavioral Strategy II
Sun: 11:15 – 12:30
Session 461: Theoretical Foundations of Behavioral Strategy III
Sun: 15:45 – 17:00
Session 360: Heuristics and Biases in Strategy Choices
Session 363: Social Influence & Comparisons
Sun: 17:15 – 18:30
Session 612: Behavioral Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 354: Goals and Aspirations
Mon: 11:00 – 12:15
Session 352: CEO Decision Making
Mon: 14:45 – 16:00
Session 265: Learning, Search, Slack: The behavioral theory revisited
Session 353: Behavioral Foundations of Mergers & Acquisitions
Mon: 16:30 – 17:45
Session 359: Cognition Under Uncertainty & Risk Taking
Tue: 08:00 – 09:15
Session 358: Cognitive Processes in Strategy
Session 362: Search for Better Strategies
Tue: 11:00 – 12:15
Session 361: Creativity and Innovation
Tue: 15:30 – 16:45
Session 355: Behavioral Elements of Institutional Theory
Session 453: Competitive Dynamics
Tue: 17:15 – 18:30
Session 356: Affective and Cognitive Processes in Strategy
Session 357: Learning Processes

Strategic Management Society