Cross-firm social ties and merger customers
This study provides an analysis on the cross-firm social tie effect on acquirer cumulative abnormal returns (CAR) and the influence of acquirer board type on this effect. Using a sample of 90 European within border merger or acquisition deals between 2002 and 2016 univariate as well as multivariate analysis is used to study the effects. The study provides evidence that all ties and educational ties have a negative effect on acquirer CAR for a three, five and seven-day event window around the merger announcement date. The study also finds a significant positive effect of strong ties on acquirer CAR for the five-day event window. Looking at the effect of board type on the cross-firm social tie effect the study finds indications, but no conclusive evidence that two-tier board acquirer firms are less affected by the negative cross-firm social tie effect compared to firms with a one-tier board.
Faculteit der Managementwetenschappen