Management optimism and corporate acquisitions: evidence from insider trading
In this study we integrate evidence about managers' personal beliefs about their firms' prospects into an analysis of managerial decisions on acquisitions and takeover resistance. We examine insider trading (a proxy for personal beliefs) around significant corporate acquisitions and find l...
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| Veröffentlicht in: | Managerial and decision economics 1997-11, Vol.18 (7-8), p.693-708 |
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| container_title | Managerial and decision economics |
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| creator | Boehmer, Ekkehart Netter, Jeffry M. |
| description | In this study we integrate evidence about managers' personal beliefs about their firms' prospects into an analysis of managerial decisions on acquisitions and takeover resistance. We examine insider trading (a proxy for personal beliefs) around significant corporate acquisitions and find little cross-sectional differences in the trading patterns of all managers around an acquisition. In general, the insiders do not change their trading patterns in the period when their firm is making an important corporate acquisition. We still obtain this result after controlling for the announcement-day abnormal return. We also find that while managers of firms that do not become takeover targets themselves and of firms that are eventually targets of friendly bids earn positive abnormal returns in the period after their trade, this is not true for managers of firms that are later subject to a hostile bid. |
| doi_str_mv | 10.1002/(SICI)1099-1468(199711/12)18:7/8<693::AID-MDE864>3.0.CO;2-0 |
| format | Article |
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We also find that while managers of firms that do not become takeover targets themselves and of firms that are eventually targets of friendly bids earn positive abnormal returns in the period after their trade, this is not true for managers of firms that are later subject to a hostile bid.</description><subject>Bids</subject><subject>Business structures</subject><subject>Commercial law</subject><subject>Corporate acquisitions</subject><subject>Dealers</subject><subject>Decision making</subject><subject>Enterprises</subject><subject>Financial management</subject><subject>Hostile takeovers</subject><subject>Insider dealing</subject><subject>Insider trading</subject><subject>Investment strategies</subject><subject>Management</subject><subject>Managers</subject><subject>Optimism</subject><subject>Securities and Exchange Commission regulation</subject><subject>Securities issues</subject><subject>Target acquisitions</subject><subject>Tender 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| identifier | ISSN: 0143-6570 |
| ispartof | Managerial and decision economics, 1997-11, Vol.18 (7-8), p.693-708 |
| issn | 0143-6570 1099-1468 |
| language | eng |
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| source | RePEc; Periodicals Index Online; EBSCOhost Business Source Complete; Access via Wiley Online Library; JSTOR Archive Collection A-Z Listing |
| subjects | Bids Business structures Commercial law Corporate acquisitions Dealers Decision making Enterprises Financial management Hostile takeovers Insider dealing Insider trading Investment strategies Management Managers Optimism Securities and Exchange Commission regulation Securities issues Target acquisitions Tender offers Trade U.S.A |
| title | Management optimism and corporate acquisitions: evidence from insider trading |
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