Abstract
This study examines the effect of performance commitment agreements (PCAs) signed in merger and acquisition (M&A) on executives’ trading behaviors based on A-share listed companies in China during 2013–2021. We find that executives of listed companies with PCAs are more likely to reduce their stock holdings after the completion of the transaction relative to M&A transactions without performance commitments. When PCAs have higher coverage of performance commitments or a higher level of internal control, the executives of listed companies are less likely to use PCAs for arbitrage.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: 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.