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| Tekijä: | Parvinen, P. Tikkanen, H. |
| Otsikko: | Incentive asymmetries in the mergers and acquisitions process |
| Lehti: | Journal of Management Studies
2007 : JUL, VOL. 44:5, p. 759-787 |
| Asiasana: | mergers consolidation stocks shareholders incentives asymmetric information |
| Kieli: | eng |
| Tiivistelmä: | This paper deals with the relationship btw. incentive asymmetries (hereafter as: inc-asyms.) and some potentially undesirable outcomes along the mergers and acquisitions (M&A) process which could potentially destroy the shareholder value of the merged corporate entity. Inc-asyms. are seen as belonging to the three categories of 'risk-antecedent', 'information-antecedent', and 'pure self-interest antecedent'. It is proposed that inc-asyms. are responsible for increases in the number of M&A projects, possibly creating a 'lemons problem' with M&A candidates. Inc-asyms. are also suggested to lead to prolonged contract-writing phases, biased financial evaluations and acquisition price escalation, as well as undermined post-M&A integration plans. In case these problems are to be resolved, the use of high- and low-powered incentive schemes will need to reflect risk, information and pure self-interest. |
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