ORCID Profile
0000-0002-1117-2698
Current Organisations
University of Waikato
,
Australian National University
,
University of Tasmania
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Publications
Does the human capital of board directors add value to firms? Evidence from an Asian market
Publisher: Informa UK Limited
Date: 2017
The relationship between ownership structure, capital structure and corporate governance practices: A case study of co-operatives and mutuals in New Zealand
Publisher: Emerald
Date: 26-08-2014
DOI: 10.1108/IJMF-12-2012-0130
Abstract: – The purpose of this paper is to investigate the nature of corporate governance practised by co-operatives and mutual societies in New Zealand and whether there is any relationship between co-operatives’ ownership structure, capital structure and agency costs. The study also explores whether the capital structure and the ownership structure changed during the period 2005-2011. – Panel data for the period 2005-2011 are analysed using ordinary least squares regression and the Tobit model regression. The authors have used operating expense to sales, asset utilisation and ROA as the dependent variables. – The findings indicate that an increase in independent directors, board member experience and size (measured by total annual sales) reduces agency costs in co-operatives and mutuals in New Zealand. Also, borrowing from members rather than banks reduces agency cost and increases profitability in co-operatives and mutuals. – Caution should be exercised when generalising the findings of the study as it is restricted to New Zealand environment and the s le size used is relatively small. – This study offers insights for policy makers internationally who are interested in adopting similar corporate governance practices in their own countries. Within New Zealand, the corporate governance debate associated with co-operatives and mutual societies will be better informed as a direct consequence of this research. – This is the first study that extends the research undertaken by Ang et al. (2000) and Singh and Davidson (2003) to the cooperative and mutual business model in New Zealand.
An empirical analysis of corporate governance impact on outreach of microfinance institutions (MFIs)
Publisher: Virtus Interpress
Date: 2015
DOI: 10.22495/COCV13I1P1
Abstract: This study examines the impact of corporate governance practices of microfinance institutions (MFIs) on outreach to the poor people in Sri Lanka by using three outreach variables: Breadth of outreach, percentage of women borrowers and depth of outreach. Data for 54 MFIs are analysed using regression analysis of unbalanced panel data from 2007 to 2012. The findings of this study revealed several significant relationships: Breadth of outreach in Sri Lankan MFIs improve when they have a female chair on the board but decreases when they have more female directors and client representation on the board, and female borrowers get more loans when the firm has women representation and international/donor directors on the board, but less loans if they have a female chair. This study provides a direction for future researchers to explore more, and recommend good corporate governance practices for MFIs to reach more poor clients.
A dynamic estimation of governance structures and financial performance for Singaporean companies
Publisher: Elsevier BV
Date: 06-2014
Governance and regulatory issues: microfinance and development of rural communities in Nepal.
Publisher: Virtus Interpress
Date: 2016
Abstract: Microfinance Institutions (MFIs) that have a mission to provide credit to the poorest of the poor appear to be the panacea for rural poverty and hardship and bring forward a promise of better tomorrows. However, MFIs as a means of expanding financial inclusion and competing with the informal financial sector are not such a success story in rural Nepal. The increasing demand for cash to meet social and religious obligations in largely subsistent village economies is increasingly supported by short-term seasonal migration. The removal of working-age males from communities produces a range of unanticipated and not necessarily desirable outcomes. MFIs, it is suggested, could ameliorate the problem and positively contribute to improved sustainable development outcomes
Access to credit by SMEs in South Asia: do women entrepreneurs face discrimination
Publisher: Elsevier BV
Date: 10-2017
Behavioural factor-based clustering to examine why small businesses choose particular bank: The New Zealand evidence
Publisher: Virtus Interpress
Date: 2019
Abstract: In this paper, using the theory of planned behaviour, behavioural and non-behavioural factors underpinning small business’ (SB) choice of a bank are explored. To date, we are unaware of any study that uses a behavioural approach to study bank selection by SBs owner/managers. These factors, discussed in the literature, form the basis of a questionnaire administered in New Zealand. Univariate & bivariate analyses, in addition to cluster analysis of the data, show that behavioral factors, such as knowing a person in the bank, prior personal banking experience and recommendation/referrals, are shown to be most important. Also, after controlling for size, industry, and age of business it is found that there is no statistically significant difference in choice variables. Further, inertia is strong once a bank is chosen and cost, while emphasized, does not trigger actions. A cluster analysis of SB owners/managers produced four different groups. However, all of these groups are affected by the same behavioural factors in their choice of a banking partner.
Agency Cost in India Banks.
Publisher: Macrothink Institute, Inc.
Date: 28-06-2015
Abstract: Agency cost in Indian banks for the period 2005 to 2013, covering pre-financial crisis, crisis and post-crisis period is empirically examined in the article. It is found that the agency costs, using two measures, vary from one bank to another and change over time. The likelihood of agency cost differing between types of banks indicates that there is a low level of consistency in the results. The choice of metric used is observed to be important as different measures produce different results. The findings also indicate there is low time invariance with respect to agency costs. The source of the agency cost is attributed, at least in part, to the governance of banks during the period analysed.
Cost of small business banking: A New Zealand study
Publisher: Springer Science and Business Media LLC
Date: 14-01-2009
Does one size fit all? An empirical investigation of board structure on family firms' financial performance
Publisher: Inderscience Publishers
Date: 2012
Board structure-performance relationship in microfinance institutions (MFIs) in an emerging economy
Publisher: Emerald
Date: 03-10-2016
Abstract: The purpose of this paper is to investigate the relationship between board structure, financial performance and outreach of microfinance institutions (MFIs) in Sri Lanka, using unbalanced panel data for 300 MFI-year observations for the period 2007 to 2012. Empirical research relating to governance practices in MFIs is still in its infancy, and further studies are needed to determine how improved governance practices may enhance sustainability and outreach of MFIs, especially in emerging economies. The authors use regression techniques to examine whether board structure has an influence on MFI performance. After controlling for internal corporate governance variables, regulatory status, size, age, leverage and year effects, the authors report that board structure does contribute to the financial performance and outreach of MFIs in Sri Lanka. The availability of data in the public domain captures the major MFIs but does constrain the generalisability of findings. This study enables in idual MFIs to evaluate potential restructuring of their boards to promote a dual mission and achieve a more accelerated economic development. The findings may encourage policy makers to promulgate policy guidelines to deepen MFI outreach to the poorest people. Inconsistent findings in prior studies and a general lack of empirical results for the microfinance industry have led to an unclear message regarding corporate governance and MFI performance. This study fills the research gap, contributing to the existing corporate governance literature in the microfinance sector and providing evidence from an emerging economy.
International comparison of returns from conventional, industrial and 52-week high momentum strategies
Publisher: Elsevier BV
Date: 10-2010
The Capital Structure of Sri Lankan Companies: A Quantile Regression Analysis
Publisher: Informa UK Limited
Date: 03-07-2014
Improving Performance in New Zealand's Public Corporations: The Effect of Governance Practices
Publisher: Wiley
Date: 27-06-2011
Ownership concentration and corporate performance from a dynamic perspective: Does national governance quality matter?
Publisher: Elsevier BV
Date: 10-2015
Cost of small business banking: a New Zealand study
Publisher: Springer Science and Business Media LLC
Date: 27-05-2009
Does CEO duality is really matter? Evidence from an emerging market
Publisher: Virtus Interpress
Date: 2011
DOI: 10.22495/COCV8I4P7
Abstract: The relationship between board leadership, firm financial performance and agency costs is examined on behalf of a s le of multinational company subsidiaries (MNCs) and local public companies (LPCs) in Sri Lanka. Five years of data for 86 MNC subsidiaries and 113 LPCs, are collected and observations are analysed using a dynamic panel GMM estimation. This study provides empirical support for stewardship theory and contingency theory when firms are multinational subsidiaries. Moreover, findings support agency theory when firms are local public companies. Finally, this study indicates that there is no optimal board leadership structure. Hence, when companies commence their exploration of corporate governance practices, firms need to recognize that firm characteristics and contingency perspective boost the impact of board leadership structure on corporate financial performance.
Agency costs and corporate governance mechanisms in Indian state-owned companies and privately owned companies - A panel data analysis
Publisher: Virtus Interpress
Date: 2014
DOI: 10.22495/COCV11I4P1
Abstract: This paper explores the impact of corporate governance reforms and changing ownership patterns of core public sector enterprises. A number of reforms were introduced by the Government of India in 1991, and intensified in 2004 with the aim of improving efficiency and financial performance across state owned enterprises. The core state enterprises provide a unique opportunity to consider two aspects of the reforms. First, did the reforms have an impact, and second, is there a distinguishable difference between wholly government owned and partially-public shareholding enterprises? The public listed companies provide a suitable reference point for comparison. A comprehensive dataset of 123 SOEs and matching listed public companies for 10 years was collected for the study. A regression approach is adopted with agency cost as the dependant variable and several corporation-specific governance variables. Size and industry are the independent variables. The findings of the study indicate that the agency costs for mixed ownership models tend to be lower than those of the concentrated state-owned firms because they operate in an open market with the market facing the regulatory framework of a competitive environment.
Socializing accounting practices in governing boards: Dairy co-operatives down-under
Publisher: Emerald
Date: 07-03-2016
DOI: 10.1108/JAOC-03-2013-0022
Abstract: – The purpose of this paper is to evaluate the accountability practices of the directors in New Zealand and Australian dairy co-operatives. An interpretation of their practices, which focus on the relationship between directors and their farmer-shareholders, is informed by Roberts’ (2001a) understandings of a socializing accountability. – The fieldwork consists of interviews with 23 directors, including all chief executive officers and chairmen, of six dairy co-operatives together with observations and document analysis. These co-operatives together comprise a significant portion of the regional dairy industry. The methodology draws from Eisenhardt’s (1989) qualitative approach to theory formation. – The authors find that these directors engage in a discourse-based, community-grounded and egalitarian form of socializing accountability. As such, their practices adhere generally to Roberts (2001a) hopes for a more considerate and humble relationship between an accountor and an accountee. – Findings add to the small pool of research on the lived experiences of co-operative boards and to a parsimonious literature in socializing accountability practices. The contributions of the study are in advancing real understandings of alternative forms of accountability, in evaluating the conditions in which these alternatives may be likely to arise and in anticipating the challenges and opportunities that arise therefrom. – The originality of the project arises from accessing the views of these industry leaders and, through their frank expressions, coming to understand how they achieve a form of a socializing accountability in their relationships with farmer-shareholders.
Capital structure and its determinants in New Zealand firms
Publisher: Vilnius Gediminas Technical University
Date: 06-11-2013
DOI: 10.3846/16111699.2012.680605
Abstract: The current study aims to empirically explore the relationship between firm characteristics, corporate governance and capital structure in New Zealand's large listed companies. Eight years of data for 40 firms listed on the NZX50 Stock Exchange, are collected and observations are analysed using a conditional quantile regression. This study finds firm-specific characteristics rather than corporate governance variables play a significant role in determining firm leverage levels. The results indicate that finance policies need to vary across firm type and firm characteristics, and should match with the different borrowing requirements of listed firms.
Financial performance in indian state-owned enterprises following corporate governance reforms
Publisher: Emerald Group Publishing Limited
Date: 19-07-2014
Corporate governance practices of small cap companies and their financial performance: An empirical study in New Zealand
Publisher: Inderscience Publishers
Date: 2008
The return to initial public offerings: A Sino-Indian comparison
Publisher: Informa UK Limited
Date: 07-2009
Dynamic Endogeneity and Corporate Governance–Performance Relationship: Lessons from the Microfinance Sector
Publisher: Emerald
Date: 09-10-2017
Abstract: The purpose of this paper is to examine the relationship between corporate governance (CG) and microfinance institution (MFI) performance, using a dynamic panel generalised method of moments (GMM) estimator to mitigate the serious issues with endogeneity. Inconsistent findings and a general lack of empirical results for the microfinance industry leave an unclear message regarding the impacts of CG on MFI performance, especially in emerging economies. The authors use GMM estimation techniques to examine whether CG has an influence on MFI performance. This study confirms that the MFIs’ contemporaneous performance and CG characteristics are statistically significantly positively linked with their past performance. This study finds statistically significant governance effects on MFI performance, including the presence of international directors and/or donor representatives on the board, client representatives on the board, percentage of non-executive directors and the quality of the national governance system. These findings provide some insights for policy-makers and practitioners to develop suitable policies and guidelines to streamline MFIs’ operations in emerging countries. Moreover, national and international investors and donors may use these finding as a benchmark for their investment and funding decisions. This paper is the first to estimate the CG and performance relationship of MFIs in a dynamic framework by applying the GMM estimation method. This approach improves upon traditional estimation methods by controlling the likely sources of endogeneity. Further, this paper examines whether quality of national-level governance characteristics is related to performance measures of profitability and outreach of MFIs.
Assessment of Water Pollution Signs in the Brazilian Pampa Biome Using Stress Biomarkers in Fish (Astyanax sp.)
Publisher: Hindawi Limited
Date: 18-02-2015
DOI: 10.1155/2015/415293
Abstract: Located in southern Brazil, the P a biome has been under constant threat due to improper management of human effluents and use of pesticides. These contaminants accumulate mainly in water resources resulting in chronic poisoning of aquatic biota. Up to date, no studies on the assessment of environmental quality in the Brazilian portion of P a biome have been undertaken. Thereby, our main goal in this study was to investigate the ecotoxicological risks caused by human activity in the Santa Maria River, a major water course in the Brazilian P a biome. Brain and muscle tissues were used for determining oxidative stress and cholinesterase biomarkers in fish ( Astyanax sp.) exposed to urban and agricultural effluents. A substantial decrease in fish muscle acetylcholinesterase activity was observed in exposed animals, compared to controls (kept under laboratory conditions). In parallel, increased lipid peroxidation and significant changes in stress-responsive antioxidant enzymes (GST, CAT, GPx, and TrxR) were detected. In the fish brain, a significant increase in GST activity is reported. In conclusion, our results showed significant changes in biomarkers of water contamination in Astyanax captured in Santa Maria River, pointing to important levels of water pollution in the region and validating the use of Astyanax in biomonitoring programs within the P a biome borders.
Supply-side investments: An international analysis of the return and risk relationship in the Travel & Leisure sector
Publisher: Elsevier BV
Date: 10-2009
Mergers and acquisitions: a review. Part 1
Publisher: Emerald
Date: 07-03-2016
Abstract: – This paper aims to review the relevant literature on mergers and acquisitions in an attempt to provide a comprehensive account of what we know about mergers and which parts of the puzzle are still incomplete. – This literature review consists of three key sections. The first part of this paper summarises the literature on the cyclical nature of mergers referred to in the literature as merger waves. The second section reviews the causes and consequences of takeovers it first reviews the causes, or drivers, of acquisitions, while focusing on the fact that acquisitions happen in waves and then reviews the consequences of takeovers, with a predominant focus on the impacts of mergers on the economic performance of acquirers. The third part of the review summarises the theories as well as previous empirical studies on determinants of announcement returns and post-acquisition performance of combined firms. – Merger activity demonstrates a wavy pattern, i.e. mergers are clustered in industries through time. The causes suggested for this fluctuating pattern include industry and economy-level shocks, mis-valuation and managerial herding. Market reaction to announcement of acquisitions is, on average, slightly negative for acquirer stocks and significantly positive for target stocks. The combined abnormal return is positive. These findings have been consistent over several decades of investigation. The prior research also identifies a number of factors that are related to performance of acquisitions. These factors are categorised and reviewed in five different groups: acquirer characteristics, target characteristics, bid characteristics, industry characteristics and macro-environment characteristics. – This review illustrates a number of issues. Prior research is heavily biased towards gains to acquirers and factors that affect these gains. It is also biased towards finding sources of value creation through mergers, despite the fact that several theories suggest that mergers can be value-destroying. In fact, value destruction is often attributed to managers’ self-interest (agency problem) and mistakes (hubris). However, the mechanisms through which mergers destroy value are rarely addressed. Aside from that, the possibility of simultaneous creation and destruction of value in acquisitions is not often considered. Finally, after several decades of investigation, a key question is not completely answered yet: “What are the sources of value in mergers and acquisitions?”
The efficacy of principle-based corporate governance practices and firm financial performance: An empirical investigation
Publisher: Emerald
Date: 29-06-2010
DOI: 10.1108/17439131011056224
Abstract: This paper seeks to address the effect that principle‐based corporate governance practices have on the financial performance of large publicly‐listed companies. In 2004, the New Zealand Securities Commission (NZSC) promulgated nine high level principles and guidelines for all business entities with an aim of improving corporate governance practices and boosting investor confidence in the New Zealand capital market. This event provides a point for empirically testing companies' responses. Panel data for the NZX top 50 companies over the period 1999‐2007 are analysed using ordinary least squares (OLS) and two stage least squares (2SLS) regression techniques to evaluate whether: those firms that were continuously compliant with the NZSC requirements perform better and the firm performance post‐NZSC recommendations is better than pre‐NZSC recommendations. Tobin's Q , market‐to‐book (MB) and return on assets (ROA) metrics are used as dependent variables.. The findings indicate that large listed companies have universally adopted the Securities Commission recommendations, establishing subcommittees for audit and remuneration, and having a majority of non‐executive/independent directors on the board which, on average, have seven members. There is support for the view that the NZSC recommendations have had positive influence on firm performance measured by Tobin's Q , MB and ROA. The results show that the presence of a remuneration committee has had a positive influence on firm performance. This study provides empirical support for the corporate governance recommendations made by the NZSC in 2004, giving support to the principle‐based corporate governance practices to be adopted in New Zealand. The sequential testing of each NZSC recommendation provides a comprehensive picture of performance outcomes which has not been achieved in prior research. The interdependency issues are of interest and the correlation between recommendations provides useful insights. This study offers insights for policy makers interested in adopting principle‐based corporate governance practices within their country. Within New Zealand, public policy developments and stock exchange listing requirements/regulatory issues with associated compliance burdens are better informed as a consequence of the research.
Informality and credit constraints: evidence from Sub-Saharan African MSEs
Publisher: Informa UK Limited
Date: 06-01-2016
Relevance of corporate governance practices in charitable organisations: A case study of registered charities in New Zealand
Publisher: Emerald
Date: 29-03-2013
DOI: 10.1108/17439131311307547
Abstract: The purpose of this paper is to examine whether the registered charities in New Zealand have adopted the principle‐based corporate governance practices similar to those adopted by the publicly‐listed companies and the effect corporate governance practices have on their financial performance measured by technical efficiency, allocative efficiency and quick ratio. The paper addresses four important questions: how registered charities in New Zealand are managed and controlled whether the funds donated to registered charities are utilised effectively the nature of the corporate governance practiced by registered charities in New Zealand and the nature of compliance to the Charities Act 2005. Panel data for the registered charities over the period 2008‐2010 are analysed using ordinary least squares (OLS) regression and Tobit model regression. Technical efficiency, allocative efficiency and quick ratio are used as the dependent variables. The findings indicate that there is no reporting requirement for the registered charities under the Charities Act 2005 to report detailed information regarding the board make‐up, board committees, board meetings, etc. and therefore, registered charities have not reported such information. The results show also that board gender ersity is an important corporate governance mechanism to mitigate agency problem in charitable organisations in New Zealand. However, large board size and large donors have potential to increase agency costs in charitable organisations in New Zealand. Caution should be exercised when interpreting and generalising the paper's results, as this study is a case study of registered charities in New Zealand and data comprised only large charities that have revenue over NZ$20 m. It should also be noted that there was a small s le size, which may have had a bearing on the results. This study offers insights for policy makers and practitioners interested in adopting similar corporate governance practices within their country. Within New Zealand, issues relating to management and control of charitable organisations are better understood and as a consequence, development of sector‐wise standards could be initiated. This research is novel as it investigates the nature of corporate governance practices relating to the registered charities in New Zealand. The availability of data provided by Charities Commission made this research possible.
Acquisition returns: Does industry matter?
Publisher: Emerald
Date: 29-07-2014
Abstract: – This paper aims to illuminate the issue of whether there is a significant difference between long-term abnormal return of acquirers across industries, and which industries achieve better returns. – This paper investigates whether there is a significant difference between abnormal return of acquirers across industries. The impact of timing of the deal on the acquirer returns is also studied in this paper. In the regression analysis, we control for acquirer’s size along with a number of deal characteristics, such as method of payment, the mode of the acquisition, the ersifying nature of the deal and value of the deal, to examine whether the differences in acquirer returns across industries persist when these factors are taken into account. – The results of the study propose discrepancy in acquirers’ long-term abnormal returns across industries. While a number of industries, such as petroleum and natural gas, insurance and machinery, experienced significantly positive abnormal performance, others like business services and medical equipment have demonstrated significantly negative long-term returns. – This paper investigates the industry impact on performance of acquirers. The results of this research provide more comprehensive evidence from all of the industries that have been involved in mergers and acquisition deals during the period 1981-2007 so that the returns of different industries can be compared. Most importantly, the evidence rejects the equality of mean abnormal returns across industries at significant levels.
Applicability of contrarian strategy in the Bombay Stock Exchange
Publisher: SAGE Publications
Date: 05-2009
DOI: 10.1177/097265270900800204
Abstract: The application of contrarian strategies in the Bombay Stock Exchange (BSE) are examined in this paper, shedding further light on competing explanations underlying this anomaly. Three specific issues are investigated using several models. First, can a trader book a profit by employing a contrarian strategy? The test portfolio earned a contrarian profit of 74.40 per cent above the market return. Second, risk differences between Winner and Loser portfolios are found to be an independent phenomenon. Third, the size of the firm appears to play a vital role in explaining the overreaction hypothesis.
Profitability of momentum returns under alternative approaches
Publisher: Emerald
Date: 21-06-2013
DOI: 10.1108/IJMF-03-2012-0028
Abstract: The analysis aims to explore how momentum return changes with alternative computational methods and the extent to which the portfolio structure is important in the momentum context. The focus reflected in the prior research emphasises the method used by Jegadeesh and Titman and various extensions to test whether momentum returns exist. This study uses alternative methods of buying previous Winners and short‐selling previous Losers to determine if this significantly changes the returns. The current study clarifies the impact of several contributory factors that impact upon estimated momentum returns. The large s le of cleaned data upon which this study is based provides a higher degree of confidence that the findings are sound and not just a statistical anomaly. The research is important from a practitioner perspective as details of momentum return are presented for each country using different methods, providing information regarding the most profitable country in which to invest and whether the momentum return is sustainable under different formative approaches. One of the important contributions of this study is a detailed empirical analysis, presenting results in a global context rather than on a single country basis.
The performance of entrepreneurial companies post-listing on the New Zealand Stock Exchange
Publisher: Informa UK Limited
Date: 2008
Impact of ownership structure on capital structure of new zealand unlisted firms
Publisher: Emerald
Date: 16-02-2015
DOI: 10.1108/JSBED-09-2011-0004
Abstract: – The purpose of this paper is to use a panel of New Zealand unlisted firms from 1998 to 2009 to examine the relationship between ownership structure and firm leverage ratios. Although, the choice of the debt in capital structure is important for all firms, the scale effects may influence the degree of influence of particular financial theories upon capital structure. – To control the endogeneity effect of insider ownership, this study uses the dynamic panel generalised method of moment estimation and uses the Granger causality test to check the causality effect of leverage and insider ownership. – The findings suggest an inverse U -shape relationship of insider ownership and leverage, indicating higher insider ownership increases management entrenchment while lower insider ownership increases misalignment of the interests of management and owners. Moreover, this study finds bi-directional causation between insider ownership and firm leverage ratios. – Finance policy needs to vary across firm type, industries and firm characteristics and should match the different borrowing requirements of small business. – This paper contributes to literature by investigating whether the structure of equity ownership can impact cross-sectional variations in capital structure. Moreover, most of the capital structure research has been conducted in large markets like USA and publicly listed firms but this paper concentrates on the evidence from New Zealand unlisted businesses. Also, the econometric analysis is more robust due to controlling for the endogeneity effect of insider ownership.
Information and communication technology adoption and small and medium-sized enterprise growth in New Zealand
Publisher: Informa UK Limited
Date: 04-2006
Mergers and acquisitions: a review (part 2)
Publisher: Emerald
Date: 08-2016
Abstract: This paper aims to review the relevant literature on mergers and acquisitions in an attempt to provide a comprehensive account of what we know about mergers and which parts of the puzzle are still incomplete. This literature review consists of three key sections. The first part of this paper summarises the literature on the cyclical nature of mergers referred to in the literature as merger waves. The second section reviews the causes and consequences of takeovers it first reviews the causes, or drivers, of acquisitions, while focusing on the fact that acquisitions happen in waves and then reviews the consequences of takeovers, with a predominant focus on the impacts of mergers on the economic performance of acquirers. The third part of the review summarises the theories, as well as previous empirical studies, on determinants of announcement returns and post-acquisition performance of combined firms. Merger activity demonstrates a wavy pattern, i.e. mergers are clustered in industries through time. The causes suggested for this fluctuating pattern include industry- and economy-level shocks, mis-valuation and managerial herding. Market reaction to announcement of acquisitions is, on average, slightly negative for acquirer stocks and significantly positive for target stocks. The combined abnormal return is positive. These findings have been consistent over several decades of investigation. Prior research also identifies a number of factors that are related to performance of acquisitions. These factors are categorised and reviewed in five different groups: acquirer characteristics, target characteristics, bid characteristics, industry characteristics and macro-environment characteristics. This review illustrates a number of issues. Prior research is heavily biased towards gains to acquirers and factors that affect these gains. It is also biased towards finding sources of value creation through mergers despite the fact that several theories suggest that mergers can be value-destroying. In fact, value destruction is often attributed to managers’ self-interest (agency problem) and mistakes (hubris). However, the mechanisms through which mergers destroy value are rarely addressed. Aside from that, the possibility of simultaneous creation and destruction of value in acquisitions is not often considered. Finally, after several decades of investigation, a key question is not completely answered yet: “What are the sources of value in mergers and acquisitions?”
Does boardroom gender diversity matter? Evidence from a transitional economy
Publisher: Elsevier BV
Date: 05-2015
Women on board, firm financial performance and agency costs.
Publisher: Springer Science and Business Media LLC
Date: 19-06-2012
Corporate governance, board diversity and firm financial performance: New evidence from Sri Lanka
Publisher: Inderscience Publishers
Date: 2013
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