Acquisition Choice Research Articles

Entrepreneurial Decisions of the Location Choice for Mergers and Acquisitions in the EU-27

ABSTRACT Locations that offer a positive business climate with strong environmental performance and sustainable practices are more likely to attract companies seeking to integrate carbon dioxide reduction strategies through mergers and acquisitions (M&A). The aim of this study is to analyze the extent to which the business climate in European countries influences the M&A market. We considered the conditions of institutional, economic or sustainability regulations to determine if the ease of doing business (EDB) index, the World Governance Indicators, and carbon dioxide emissions can influence the evolution of M&A. After applying the Ordinary Least Squares regression and panel analysis, the conclusion was that sustainability criteria are important factors for investors when choosing the companies to invest in.

The Missing Dimension of Risk: Evidence from Inside Debt Maturity and Acquisition Choices *

The Missing Dimension of Risk: Evidence from Inside Debt Maturity and Acquisition Choices *

The Impact of Language Socialization on the Linguacultural and Motivational Profiles of Multilingual Learners

The study discusses how different language socialization (Ochs & Schieffelin, 2017) experiences and processes result in learners’ different linguistic and cultural backgrounds affecting their attitudes toward language learning, their self-perception as language learners, and ultimately their motivation to learn languages. Data were collected via linguistic autobiographies written by 14 students who came from five different countries in a multicultural classroom at a Hungarian university. The content analysis of the rich textual data pointed out a sharp contrast between the socialization of Hungarian and international students resulting in two distinct linguacultural and language learning motivational profiles. Exposure to multiple linguacultures (Risager, 2005) during socialization in the contexts of home, ethnic/multicultural communities, or sojourn generates positive attitudes toward language learning and favorable self-images as language learners. This makes learners more likely to take up additional languages in their spare time in addition to languages learned at school and enables them to move smoothly between different cultures and use their languages in authentic cultural contexts with ease. The results corroborated the inherent connection between choice, autonomy, motivation, and identity in second language acquisition (SLA). Learner testimonies pinpointed the changed status of English and German in Europe and in the world resulting in increased motivation to learn English for various reasons at the expense of German learning. In short, the findings revealed that the linguacultural vitality of a language as an environmental factor and learners’ choice to learn a language along with their desire to fulfil themselves via the chosen language as learner-internal factors greatly impact the success of SLA.

Family Firms’ Shareholder Structure and International Acquisitions: A Differentiated Socioemotional Wealth Approach

From a mixed gamble perspective, we contend that family firms (FFs) with different family shareholder structures are confronted with different trade-offs among current and prospective financial and socioemotional wealth (SEW), leading to differences in their international acquisition choices. We also explore the moderating role of family leadership and performance aspirations. Our findings show that FFs with a dominant family owner are more likely to pursue international acquisitions, especially when FFs are led by a family CEO or when they experience below-target performance, as in such cases, they prioritize prospective financial and SEW gains, thereby sacrificing current SEW and financial wealth.

Deviation from the Target Capital Structure and Acquisition Choices

This paper aims to discuss how managers consider capital structure variations when deciding which purchases to make. Compared to their debt ratio, highly leveraged companies are less likely to decide to buy cash. These companies purchase unimportant goals at a bargain. The capital structures of over-leveraged companies are changed by their managers in anticipation of a merger or acquisition. The methodology entails the approach to the research, and the right debt-to-capital ratio was found by using Compustat and the Center for Research on Security Prices (CRSP). These data will be used in assessing the estimation model and various regression and correlation analyses. Finally, they look for acquisitions that will add the most value. This research examines the relationship between capital structure and investment choices in the context of financial frictions, highlighting the importance of capital structure in investment choices.

Board gender diversity and acquisition choices

AbstractWe investigate the influence of gender diversity on the acquisition choices of bidding firms and find that firms with greater gender diversity are more likely to acquire nonlisted targets, use cash as the method of payment, and purchase firms in similar industries. Results show that these preferences are significantly influenced by female directors' financial expertise, target industry experience, mergers and acquisitions (M&A) experience, academic and professional qualifications, and networks. The percentage of female directors on boards is positively correlated with the market response to the announcement of acquisition choices preferred by female directors. Furthermore, bidders improve efficiency and accumulate long‐term value gains through the contributions made by their female directors to these acquisition choices.

An Option-Based Approach to Measuring Disclosure Asymmetry

ABSTRACTIn this paper, I develop a measure of the difference in the amount of information that investors expect a forthcoming disclosure to contain should it reveal good news versus bad news (the disclosure’s “asymmetry”). To do so, I first show that this asymmetry is linked to the skewness of returns that the disclosure creates. I then show that this skewness can be measured using a weighted change in option-implied return skewness leading up to the disclosure’s release. The measure’s ability to capture investors’ prior beliefs regarding asymmetry is advantageous when studying ex ante decisions including contracting and information acquisition choices. I implement it on a sample of large firms’ quarterly earnings announcements, finding evidence that investors anticipate cross-sectional but not time-series variation in earnings’ asymmetry.

50 shades of procurement: the European defense trilemma in defense procurement strategies

This article examines the strategic choices of countries regarding their acquisition of defense equipment, given the strategic and economic constraints that they have faced since the end of the Cold War. As Augustine’s laws make it increasingly complicated to develop and produce all the necessary weapons for a single country, countries must balance the wishful thinking of preserving industrial strategic autonomy and the cost of doing so under the constraint of meeting the needs of their armed forces. We discuss a trilemma of the European countries between independence, manageable costs, and economic spinoff. We analyze several procurement alternatives, including national production, European cooperative production, licensed production, off-the-shelf purchase, leasing, and capacity abandonment. Maximizing both strategic and economic advantages, is a myth. There is no “silver bullet” in terms of acquisition choice, and the returns on investment depend on countries’ preferences, goals, and markets.

Minority versus majority: The choice of acquisition in Asia‐Pacific countries

AbstractThis paper examines the relationship between the financial constraints of the acquiring firms and their choice of a minority over a majority acquisition. Our findings show that the likelihood of bidders undertaking a minority acquisition increases with financial constraints, including the deviation from target capital structure, and overleverage deficit. We also find that the impacts of leverage deviation on the likelihood of bidders engaging in a minority or majority acquisition is asymmetric for underleveraged and overleveraged firms. In addition, international bidders are less likely to take a minority acquisition if the target is operating in (i) countries with a higher degree of Political Stability and Absence of Violence/Terrorism, (ii) countries with higher degree to which individuals are able to participate in selecting their government, as well as having more freedom of expression, freedom of association, and a free media. Lastly, minority acquisitions are more common in a country with a more developed market. As such, in a fluid social order it looks like acquirers really need majority control.

A decade of the Missouri Hunger Atlas: Information for action

For over a decade, researchers at the University of Missouri Interdisciplinary Center for Food Security (ICFS) have produced five editions of the Missouri Hunger Atlas. Through a series of indicator maps and tables, the Atlas engages readers visually to help them understand the extent of local food inse­curity across the state. The Atlas also assesses the performance of public and private programs that help people struggling to obtain sufficient healthy food. In this reflective essay, we discuss the pro­cess of creating the Atlas, the choice of indicators and data acquisition, the evolution of the Atlas over time, and how various groups use the Atlas for policy and action. The Atlas has become a go-to resource for a wide range of users, including policymakers, academics, food bank staff, Exten­sion specialists, and advocates for low-income fam­ilies. The first ten years of the Atlas have demon­strated that measurement is a dynamic process, requiring ongoing adjustments by re­searchers through discourse with data providers, stakeholder groups, and communities. Given the popularity of the Atlas and the availability of com­parable second­ary data for other state and county geographies, replication of this model by other states is feasible.

Financial constraints, ownership dilution, and the method of payment in M&A transactions

The method of payment choice in merger and acquisition (M&A) transactions has been the subject of much research in the finance literature. But significant changes in the economic environment of acquirers in the U.S. call into question whether known stylized facts are still valid and motivate us to undertake new empirical analyses. Using a large sample of M&A transactions spanning the last two decades, we investigate the financial constraints versus ownership dilution tradeoff that potentially drives negotiations about the method of payment (i.e., stock or cash), controlling for an extensive list of other potential determinants. The main takeaway from our analyses is that financial constraints are a dominant factor motivating acquirers to include stock (at least partially) in the method of payment package in M&A transactions in the recent period.

Lag-Optimized Blood Oxygenation Level Dependent Cerebrovascular Reactivity Estimates Derived From Breathing Task Data Have a Stronger Relationship With Baseline Cerebral Blood Flow.

Cerebrovascular reactivity (CVR), an important indicator of cerebrovascular health, is commonly studied with the Blood Oxygenation Level Dependent functional MRI (BOLD-fMRI) response to a vasoactive stimulus. Theoretical and empirical evidence suggests that baseline cerebral blood flow (CBF) modulates BOLD signal amplitude and may influence BOLD-CVR estimates. We address how acquisition and modeling choices affect the relationship between baseline cerebral blood flow (bCBF) and BOLD-CVR: whether BOLD-CVR is modeled with the inclusion of a breathing task, and whether BOLD-CVR amplitudes are optimized for hemodynamic lag effects. We assessed between-subject correlations of average GM values and within-subject spatial correlations across cortical regions. Our results suggest that a breathing task addition to a resting-state acquisition, alongside lag-optimization within BOLD-CVR modeling, can improve BOLD-CVR correlations with bCBF, both between- and within-subjects, likely because these CVR estimates are more physiologically accurate. We report positive correlations between bCBF and BOLD-CVR, both between- and within-subjects. The physiological explanation of this positive correlation is unclear; research with larger samples and tightly controlled vasoactive stimuli is needed. Insights into what drives variability in BOLD-CVR measurements and related measurements of cerebrovascular function are particularly relevant when interpreting results in populations with altered vascular and/or metabolic baselines or impaired cerebrovascular reserve.

China’s Outward Direct Investment in the United States: From the perspective of agglomeration economies

Over most of the last two decades, China’s Outward Direct Investment (CODI) has reshaped the global economic landscape and attracted considerable attention. Although extensive research shows that CODI features agglomeration, there is limited research from the perspective of different patterns of agglomeration economies at the subnational level. It is unclear which patterns of agglomeration economies play a role in the location choice of CODI, especially with the variations of CODI in terms of entry mode and ownership. Therefore, based on the data of the CODI in the United States in the period 2000–2016, we use a conditional logit model to investigate the influence of specialized and diversified agglomeration of local firms as well as industry-specific and industry-diverse agglomeration of Chinese investors on the location choice of CODI, and further explore the heterogeneous influence concerning the entry mode and ownership. Our results show that among a variety of agglomeration economies, the specialized agglomeration of local firms is the premier factor influencing the location choice of CODI, even exceeding the influence of industry-specific agglomeration of CODI in the same industry. Industry-diverse agglomeration of CODI plays a weak role, while diversified agglomeration of local firms has no effect. Moreover, the location choice of acquisition is more sensitive to the specialized agglomeration of local firms than that of greenfield investment, and the influence of the industry-diverse agglomeration of CODI has no effect on the location choice of acquisition. In terms of the ownership, the location choice of state-owned enterprises (SOEs) is more sensitive to the specialized agglomeration of local firms and industry-specific agglomeration of CODI than that of private investment, and the industry-diverse agglomeration of CODI has no significant impact on the location choice of SOEs’ offshoring subsidiaries.

Why hunt? Why gather? Why share? Hadza assessments of foraging and food-sharing motive

Over the last half century, anthropologists have vigorously debated the adaptive motivations underlying food acquisition choices and food-sharing among hunter-gatherer groups. Numerous explanations have been proposed to account for high-levels of generosity in food-sharing, including self- and family-provisioning, reciprocity, tolerated theft and pro-social- or skill-signaling. However, few studies have asked foragers directly and systematically about the motivations underlying their foraging and sharing decisions. We recruited 110 Hadza participants and employed a combination of free-response, yes/no, ranking and forced-choice questions to do just this. In free-response answers, respondents typically gave outcome-oriented accounts of foraging motive (e.g., to get food) and moralistic accounts of sharing motive (e.g., I have a good heart). In ranking tasks, participants gave precedence to reciprocity as a motive for sharing food beyond the household. We found small but clear gender differences in foraging motive, in line with previous predictions: women were more likely than men to rank family-provisioning highly whereas men were more likely than women to rank skill-signaling highly. However, despite these gender differences, the relative importance of different motivations was similar across genders and skill-signaling, sharing and family-provisioning were the most important motivators of foraging activity for both men and women. Contrary to the expectations of tolerated theft, peer complaints and requests for food ranked very low. There are several compelling reasons that evolutionary thinkers, typically interested in ultimate-level adaptive processes, have traditionally eschewed direct and explicit investigations of motive. However, these data may yet provide important insights.

Power of Advertising on Buying Behavior of Woman Apparel and Products

In the modern-day technology of facts eruption and the age of media, advertisement performs a vital role in converting the behavior and mindset of purchasers toward the product shown in advertisement. It not only changes the manner of product consumed. It alters the mindset with which they study the product. This paper explores effect of women's buying behavior toward apparel and products. A questionnaire consisting of 13 questions was floated in a single state, i.e. Uttar Pradesh, and with 353 responses, it could be said that advertising has significant impact on the acquisition choice of women.

Pre-deal differences in corporate social responsibility and acquisition performance

Drawing on the portability theory, we examine how the pre-deal gap in corporate social responsibility (CSR) between the bidder and target affects announcement returns in the international takeover market. We find that the higher the bidder's CSR scores relative to the target's, the higher is the synergy captured by combined cumulative abnormal returns of bidders and targets. It supports our hypothesis that synergistic gains are higher when the ex-ante bidder-target CSR gap is positive. The results also show that the synergy effect of CSR is not shared between bidder and target firms; thereby, bidders earn abnormal returns while targets lose. We further document that the acquirers with higher CSR practices before the acquisition are more likely to engage in related and non-cash-financed deals, and capital markets reward these acquisition choices. Finally, the results show that a positive CSR gap reduces the takeover premium and the time taken to complete the deal. Overall, the results suggest a positive valuation for the shareholders of the combined firm resulting from the portability of higher CSR practices from bidders to targets. Our results are subject to a battery of robustness tests, including alternative measures of combined returns and CSR, and tests for endogeneity.

The comparative study of three nonparametric methods of SAR tomography for building reconstruction

Over the past years, synthetic aperture radar (SAR) tomography (TomoSAR) has indicated significant potentials for three-dimensional (3D) reconstruction of buildings in urban areas. A large number of SAR images are thus required to perform tomographic inversions in non-parametric spectral estimators. To this end, in the case of a limited choice of SAR acquisitions, the present study aims to evaluate the capabilities of five non-parametric spectral estimation (SE) techniques, including linear prediction (LP), maximum entropy (ME), and minimum norm (MN), Capon, and beamforming (BF) in the tomographic reconstruction of urban environments. The performance analysis is carried out by using both simulated and real SAR datasets. The study results demonstrate that the proposed efficient LP estimator, minimizing the average output signal power over the antenna array elements, can separate the layover scatterers along the height direction. This low-computational SE method is thus able to clean side lobes while using a small number of observations. The proposed algorithms, as applied on TerraSAR-X strip-map images of the city of Tehran, Iran, verify the effectiveness of the non-parametric LP reconstruction technique for urban buildings. The estimated height of the scatterers also indicates that the LP estimator is similar to the field-based measurements once compared with ME, MN, Capon, and BF reconstruction methods.

Do company size and strategy matter in the choice of partial or full acquisitions

Do company size and strategy matter in the choice of partial or full acquisitions

Dementia ConnEEGtome: Towards multicentric harmonization of EEG connectivity in neurodegeneration

The proposal to use brain connectivity as a biomarker for dementia phenotyping can be potentiated by conducting large-scale multicentric studies using high-density electroencephalography (hd- EEG). Nevertheless, several barriers preclude the development of a systematic “ConnEEGtome” in dementia research. Here we review critical sources of variability in EEG connectivity studies, and provide general guidelines for multicentric protocol harmonization. We describe how results can be impacted by the choice for data acquisition, and signal processing workflows. The implementation of a particular processing pipeline is conditional upon assumptions made by researchers about the nature of EEG. Due to these assumptions, EEG connectivity metrics are typically applicable to restricted scenarios, e.g., to a particular neurocognitive disorder. “Ground truths” for the choice of processing workflow and connectivity analysis are impractical. Consequently, efforts should be directed to harmonizing experimental procedures, data acquisition, and the first steps of the preprocessing pipeline. Conducting multiple analyses of the same data and a proper integration of the results need to be considered in additional processing steps. Furthermore, instead of using a single connectivity measure, using a composite metric combining different connectivity measures brings a powerful strategy to scale up the replicability of multicentric EEG connectivity studies. These composite metrics can boost the predictive strength of diagnostic tools for dementia. Moreover, the implementation of multi-feature machine learning classification systems that include EEG-based connectivity analyses may help to exploit the potential of multicentric studies combining clinical-cognitive, molecular, genetics, and neuroimaging data towards a multi-dimensional characterization of the dementia.

Economic policy uncertainty and acquisition performance: Australian evidence

We investigate the influence of economic policy uncertainty on the market valuation of acquisitions undertaken by Australian firms, finding a negative association between economic policy uncertainty and abnormal returns earned by acquirers. In general, with greater economic policy uncertainty, acquirers pay higher premiums, execute transactions more quickly and are less likely to complete deals. With respect to acquisition choices, acquirers prefer to purchase public targets versus private targets, use stock swaps versus cash in financing deals and are less likely to make cross-border acquisitions. Deals completed at a time of heightened economic policy uncertainty are found to contribute to acquirers’ significant underperformance in the long run. Our main findings are robust after addressing issues related to sample selection bias and selection based on observable firm characteristics. Our findings support the notion that economic policy uncertainty adversely affects acquisition outcomes in Australia.