Management Quality and Acquisition Profitability

Management Quality and Acquisition Profitability This study empirically examines the association between the quality and reputation of a firm’s management team and its acquisition-investment decisions, a relationship that has so far received little attention in the academic literature. My study builds on the argument that the quality and reputation of a firm’s top management is an important factor in determining a firm’s investment decisions. The prediction is that better and more reputable managers are able to pursue more profitable acquisitions and implement them more ably, resulting in better long-term stock price performance and operating performance following the acquisitions. Therefore, my work contributes to accounting and finance literatures by document that a firm’s management quality and reputation is an important internal governance mechanism that leads to more profitable acquisition decisions.

Project ID:PF10006-0832
External Project ID:NSC100-2410-H182-009