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| Author: | Shen, J-C. Reuer, J.J. |
| Title: | Adverse selection in acquisitions of small manufacturing firms: a comparison of private and public targets |
| Journal: | Small business economics
2005 : MAY, VOL. 24:4, p. 393-407 |
| Index terms: | adverse selection manufacturing industry mergers small and medium-sized enterprises (smes) |
| Language: | eng |
| Abstract: | This article investigates acquisitions of small manufacturing companies and compares private and public targets. The study develops the argument that private targets tend to involve higher transaction costs in the presence of adverse selection problems than their public counterparts. Consistent with predictions, the empirical evidence indicates that bidders choose to acquire public rather than private targets when acquiring young companies and when engaging in inter-industry transactions. |
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