Abstract
This study examines whether top managerial executive envy plays an important role in merger waves. Since managerial benefits, especially compensation, always increase with firm size, the envy hypothesis conjectures that top executive officers rush into acquisitions due to their envious psychology once other executives initiate them. Six empirical predictions of the envy hypothesis concerning – bidder (target) size, transaction size, value creation for bidders, compensation increases for top managers, likelihood of bidding, as well as total gains (synergies) from mergers – are tested in the context of the banking industry and find that merger waves are motivated by envy‐pay.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
