Likelihood Of Acquisition Research Articles

Does a Target Platform’s Reverse Resource Transfer Always Mean a Loss? The Perspective of User-Generated Content Volume

We have witnessed tremendous growth in platform firms over the past several years. Given the “winner take all” principle of two-sided markets, platform firms usually engage in aggressive strategies to compete, increasing the likelihood of mergers and acquisitions (M&As). The extant literature, however, concentrates on competition strategies while neglecting cooperation strategies in the context of platform M&A. Thus, this study focuses on the implementation of a reverse resource transfer policy during the post-M&A integration of two transaction platforms. Using data obtained from the target platform of the M&A event, we perform regression discontinuity design to analyze the causal effect of the policy change on user-generated content (UGC) volume of merchants in a target platform. The results indicate that the policy change leads to a positive discontinuity jump for the UGC volume of merchants around the cutoff point. Specifically, policy change increases the volume of reviews with pictures and the number of interactions within reviews in both the short and long run. These findings help to deepen our understanding of the impact of reverse resource sharing of the target platform firm on the generation of UGC and clarify how different types of agents can benefit from the strategy.

Pioneer (Dis-)advantages in Markets for Technology

This study sheds new light on first- and early-mover advantages in the context of product innovation. Research on this classic topic often assumes that each firm participates in the entirety of the innovation and commercialization process. However, a division of labor between innovative new entrants and incumbents with complementary assets is common in many industries. In such settings, small new entrants have the additional option to be acquired in a “market for technology.” Using data from the U.S. medical device industry, we find that pioneers “pave the way” for a new product type to reduce the technological and market risks, where the former is of paramount importance. Pioneers enjoy an early-mover advantage in the form of a higher likelihood of acquisition, with the disadvantage that they wait longer to be acquired. Therefore, to some extent, later movers can free ride on early-movers’ efforts.

New Venture Teams and Acquisition: Team Composition Matters

This study examines the relationship between the composition of new venture founder teams and acquisition likelihood as a coveted exit route for entrepreneurs and investors. We find that gender diversity and the average education level of team members are positively related to acquisition likelihood. In addition, our results indicate a negative effect of industry experience level diversity on acquisition likelihood. This study provides insight into the significant role of founder characteristics in team-founded ventures as it relates to acquisition likelihood and the results may be of interest to both founders and external investors.

Bank Integration and the Market for Corporate Control: Evidence from Cross-State Acquisitions

How does bank integration affect the market for corporate control for nonfinancial firms? We provide causal evidence that interstate bank deregulation affects acquisitions mainly through reducing the information asymmetry between acquirers and targets, instead of increased credit supply. After deregulation, the likelihood of cross-state acquisitions significantly increases, and more so if the target borrows from an out-of-state bank, the target’s bank is acquired by an out-of-state bank, the target’s state has reciprocal interstate bank deregulation with the acquirer’s state, or the target is opaque. The reduced information asymmetry increases announcement returns for acquirers of out-of-state (particularly private) targets after deregulation.

SYPHILIS AND HIV COMORBIDITY: NEGATIVE CLINICAL AND EPIDEMIOLOGIC SYNERGY

Recently, management of patients co-infected with syphilis and HIV infection is becoming an increasingly important problem. Similarity of circumstances and ways of HIV and syphilis transmission as well as populations at risk of infection suggests that in the coming years the number of cases of co-infection will increase. The .negative synergy. of HIV infection and syphilis has been proven. This means a mutual reinforcement of the negative effect, when each of the diseases in their combination is more unfavorable than the separately existing disease. Syphilis increases the likelihood of HIV acquisition and transmission during unprotected sexual intercourse and contributes to the progression of HIV infection. On the other hand, it is traditionally believed that concomitant HIV infection can significantly change clinical features and course of syphilis and make its diagnosis and treatment more complicated. However, the widespread use of antiretroviral therapy has allowed to significantly reduce this negative effect. The review article is devoted to the problem of the biological and epidemiological .synergy. of these two infections, as well as to the analysis of modern data on the clinical features of syphilis developing against the background of HIV infection.

Asset sales and subsequent acquisitions

In this paper, we find that the decisions to retain asset sale proceeds are positively related to the likelihood of subsequent acquisitions. We demonstrate that retention decisions destroy the wealth of shareholders. First, we document negative market reactions towards a retention decision, and the effect is more pronounced when the decision is followed by an unexpected acquisition. Second, we show that subsequent acquisitions reduce the wealth of shareholders, especially when the acquisitions are unexpected by the market. Third, retention sellers' long-run performance declines when they pursue an acquisition following the sale of their assets. Altogether, we provide novel evidence suggesting that retention sellers tend to reallocate proceeds to specific acquisitions that are detrimental to shareholders' wealth.

Are Team-founded Ventures More Likely to be Acquired?

Given the vibrant market for the acquisitions of new ventures, identifying the determinants of these acquisitions is an important question for practitioners and academics alike. We investigate whether team ventures are more likely to be acquired than single-founder ventures, and if so, attempt to determine what number of founders, or team size, is associated with the highest acquisition likelihood. Using the Kauffman Firm Survey (KFS) panel data, our results indicate that team-founded new ventures are 42% more likely to be acquired, and that there is an inverted U-shaped relationship between team size and acquisition likelihood. However, a more rigorous look at the data reveals that the inverted U-shaped relationship suggested by the regression results is driven by data points associated with very large teams, the incidence of which is too rare to provide reliable estimates. If we focus only on single digit team sizes for which the data is more abundant (especially up to 4-5 team members), a positive relationship between team size and acquisition likelihood is observed. The hypothesized inverted U-shaped relationship cannot be supported, most likely because new ventures self- select out of cumbersome team sizes.

Resource reconfiguration: Surviving the inertia of a legacy technology orientation

During technological change, to enhance the likelihood of product- market survival, firms must reconcile the tension between a legacy technology orientation – ‘a firm’s relative emphasis on technological knowledge and products aligned to an incumbent technology’ and new technology adoption. Resource reconfiguration through corporate scope decisions and their structural arrangement choices reconciles this tension. A legacy technology orientation exerts inertia through a legacy reinforcement effect – decreasing the likelihood of new technology acquisitions and legacy technology divestitures. New technology alliances mitigate inertia through a legacy attenuation effect - increasing the likelihood of acquisitions/divestitures. We find that in the event of acquisitions/divestitures, firms choosing hybrid structural arrangements involving the joint deployment of legacy and new technology resources benefited from a legacy reconciliation effect and were more likely to survive.

Bailouts: The lesser of two evils?

This paper investigates the relation between bailouts and regulation. Regulation, by limiting the room for government intervention in the market, can affect the likelihood and size of a bailout. While a higher level of regulation is associated with a lower likelihood of a direct acquisition, such countries resort to a higher use of State aid. The findings suggest the more transparent nature of direct acquisitions, makes them the lesser of two evils. In this light, policymakers should monitor State Aid and bailouts together, with the aim of making the former more transparent.

Short interest in mergers: anomalies in the overvaluation hypothesis

PurposeHigh short interest is associated with overvaluation, and the purpose of this paper is to find contradictions to the commonly held “overvaluation hypothesis” when merger and acquisition (M&A) targets are examined. This paper extends the work of Ben-David et al. (2015), who confirm high short interest indicates overvaluation when focused on acquiring firms.Design/methodology/approachShort interest is examined as a predictor of acquisition likelihood using longitudinal data for US firms from 2003 to 2013. How short interest impacts the premiums paid by acquiring firms is examined with target, acquirer and deal characteristics.FindingsM&A targets have high short interest and short interest increases acquisition likelihood, suggesting undervaluation. Highly shorted firms also experience outsized reductions in share price prior to merger announcements, and the premiums paid are also significantly predicted by short interest levels.Research limitations/implicationsShort selling activity can be motivated for reasons other than overvaluation, and many short positions can be held for long periods before they are closed, leading to high short interest levels for extended periods. Therefore, investors and researchers are cautioned that high short interest levels may exist in stocks that have already declined in price and could be poised for a reversal.Originality/valueThis study adds to the growing body of work indicating that short interest might not be the signal of overvaluation most researchers accept it to be.

Individual dispersal delays in a cooperative breeder: Ecological constraints, the benefits of philopatry and the social queue for dominance.

Delayed dispersal is a key step in the evolution of familial animal societies and cooperative breeding. However, no consensus has been reached on the ecological and social circumstances driving delayed dispersal. Here, we test predictions from the ecological constraints and benefits of philopatry hypotheses as well as the recently proposed dual benefits hypothesis to better understand the evolution of group-living and cooperative breeding. Furthermore, we consider how individual social circumstances within groups affect dispersal decisions. We examine 11years of life-history information on a wild population of cooperatively breeding southern pied babblers Turdoides bicolor. We investigate the effects of ecological conditions, natal-group membership and individual social context on male and female dispersal delays, disperser survival and acquisition of dominance. Female dispersal decisions are generally unconstrained by ecological or social circumstances. In contrast, males disperse in response to relaxed ecological constraints, decreases in nepotistic tolerance or when low social rank in the queue for dominance decreases their likelihood of gaining a dominant breeding position. Early dispersal by end-of-queue males often leads to a head-of-queue subordinate position in a non-natal group, thereby increasing access to dominant breeding positions. However, males and females remaining in natal groups gain benefits of philopatry via increased survival and, for head-of-queue males, very high likelihood of acquisition of a breeding position. Overall, predictions from the dual benefits hypothesis best describe these results, while some predictions from each of the ecological constraints and benefits of philopatry hypotheses were supported. The benefits of living and working together (collective action benefits) in large stable groups are of central importance in shaping dispersal delays in southern pied babbler societies. In addition, position in the subordinate social queue for dominance is the key in determining access to reproduction, particularly for males. This research highlights the importance of considering the costs and benefits of individual social circumstances in dispersal decisions and illustrates how the dual benefits hypothesis offers new perspectives in understanding delayed dispersal.

Acceptability of Peer-Delivered HIV Testing and Counselling Among Men Who Have Sex with Men (MSM) and Transgender Women (TW) in Myanmar

Men who have sex with men (MSM) and transgender women (TW) are a priority population for HIV prevention in Myanmar but report sub-optimal HIV testing frequency. Previous studies have shown that peer involvement in HIV testing can normalize stigmatized sexualities and reduce barriers to testing. We explored the acceptability of peer-delivered HIV testing among 425 undiagnosed MSM and TW in Yangon and Mandalay. An overwhelming majority of participants (86%) reported being 'comfortable/very comfortable' with peer-delivered HIV testing. Logistic regression identified reporting sexual identity as Apone [adjusted odds ratio (aOR) 3.8; 95% CI 1.2-11.7], recent HIV testing (aOR 3.1; 95% CI 1.4-6.5), reporting a high likelihood of HIV acquisition (aOR 3.6; 95% CI 1.7-7.6), and reporting≥5 casual partners in the past 3months (aOR 0.2; 95% CI 0.1-0.6) as associated with peer-delivered HIV testing acceptability. Given ongoing HIV vulnerability among MSM and TW in Myanmar, peer-delivered testing may offer prevention benefits by increasing testing rates and identifying undiagnosed infection earlier.

Cross-country determinants of ownership choices in cross-border acquisitions: Evidence from emerging markets

We examine the cross-country determinants of bidder ownership choices regarding (i) government quality, (ii) economic freedom, (iii) international trade, (iv) financial development, and (v) cultural distance, in cross-border acquisitions of emerging markets-located targets. The sample comprises 16,806 acquisitions across 41 emerging markets in the 2000–2015 period. We find that the likelihood of a planned (and completed) minority acquisition relative to a majority or full acquisition is higher if the target operates in a country with poorer government quality, inferior economic freedom, stronger restrictions on international trade, lower financial development, and greater cultural distance with the bidder country. Differences in these institutional attributes between bidder and target countries similarly are informative of bidder acquisition decisions. The results suggest that bidders actively assess cross-country characteristics as part of their acquisition planning, including risk, benefits and acquisition likelihood. The findings provide potential mechanisms for countries to further increase foreign investment through cross-border acquisitions.

Insider Tax Effects on Acquisition Structure and Value

We hypothesize that prior evidence of target shareholder capital gains tax liabilities affecting acquisition features is driven by the tax liabilities of the target firm CEO. To test this, we estimate CEOs’ capital gains tax liabilities for a large sample of acquisitions and examine the effects of such liabilities on acquisition outcomes. Results indicate that the previously documented positive relations between shareholder-level capital gains tax rates and 1) the likelihood of a nontaxable acquisition (Ayers, Lefanowicz, and Robinson 2004) and 2) acquisition premiums (Ayers, Lefanowicz, and Robinson 2003) are largely driven by CEO tax effects. We also find evidence consistent with 1) CEOs’ tax incentives leading to potential agency conflicts under certain conditions and 2) acquisition structure or premium being adjusted in response to CEOs’ taxes depending on the alternatives available to the acquirer. Our study contributes to our understanding of what and whose taxes affect acquisition structure and value.

The sweetness of successful goal pursuit: Approach-motivated pregoal states enhance the reward positivity during goal pursuit.

Traditionally, the reward positivity (RewP) is thought to index a binary performance monitoring system sensitive to approach motivation. However, recent theoretical models have argued that feedback processing extends beyond simple "good" vs. "bad" associations, such that performance monitoring incorporates the complex, multi-step sequence of behaviors often necessary to attain rewards. The present study sought to go beyond simple stimulus-response paradigms to examine how approach-motivated states occurring in multi-step goal pursuit impacts the RewP. Additionally, outcome frequency was varied to examine how the P3, a neural marker of expectancy, influences the RewP. Using a modified monetary incentive delay paradigm, participants played a reaction time game where multiple correct responses were required to attain a reward. Additionally, each trial had the potential for a reward (approach-motivated state) or no reward (neutral state). Results revealed that RewP amplitudes were larger after reward trial win feedback than after reward trial no-win feedback across multiple stages of goal pursuit. Additionally, after for controlling outcome frequency via the P3, RewP amplitudes were larger in reward trials than in neutral trials across incremental stages of goal pursuit. The RewP appears to be sensitive to feedback indicating successfully completing sub-goals during pursuit of a goal, even when no immediate reward is given. Approach motivation enhances performance monitoring when multiple steps are needed to attain a desired outcome, which may increase the likelihood of goal acquisition and attainment.

Association between antibodies against group B Streptococcus surface proteins and recto-vaginal colonisation during pregnancy

Group B Streptococcus (GBS) recto-vaginal colonisation in pregnant women is the major risk factor for early-onset invasive GBS disease in their newborns. We aimed to determine the association between serum antibody levels against 11 GBS surface proteins and recto-vaginal acquisition of GBS colonisation during pregnancy. Sera collected from pregnant women at 20–25 weeks and ≥37 weeks of gestation age were measured for IgG titres against GBS surface proteins using a multiplex immunoassay. Women were evaluated for recto-vaginal colonisation every 4–5 weeks. We observed that the likelihood of becoming colonised with GBS during pregnancy was lower in women with IgG titres ≥200 U/mL against gbs0233 (adjusted OR = 0.47 [95% CI: 0.25–0.89], p = 0.021) and ≥85 U/mL for gbs1539 (adjusted OR = 0.44 [95% CI: 0.24–0.82], p = 0.01) when comparing between women who acquired GBS colonisation and those that remained free of GBS colonisation throughout pregnancy. IgG titres (U/mL) specific to BibA and Sip were higher in pregnant women colonised with GBS (380.19 and 223.87, respectively) compared to women with negative GBS cultures (234.42 and 186.21, respectively; p < 0.01) at ≥37 weeks gestation. Antibodies induced by gbs0233 and gbs1539 were associated with a reduced likelihood of recto-vaginal GBS acquisition during pregnancy and warrant further investigation as vaccine targets.

Institutional distance, establishment mode choice and international experience: the case of Indian MNCs

PurposeFocusing on the growing importance of Indian multinational corporations in the past decades, this paper aims to understand how establishment mode decisions in a foreign market can differ depending on a series of factors. Specifically, the authors examine how institutional distance, including cultural distance and political risk, could affect these decisions, and how international acquisition experience could moderate this relationship.Design/methodology/approachThe authors test their hypotheses using data from 114 outward foreign direct investments between 2000 and 2010.FindingsThe findings suggest that experience in international acquisitions increases the likelihood of subsequent acquisitions in high-risk and culturally distant countries.Originality/valueBy considering that the country of origin also matters, some differences among emerging-market multinational corporations (MNCs) may arise. Besides, since empirical research focusing on emerging-market MNCs is scarce, more empirical studies are needed to analyze the influence of cultural distance and political risk on some decisions. In the case of India, there are also additional motivations for analyzing those institutional factors. First, since this is a country with significant linkages to Western countries, it is interesting to know if the influence of cultural distance is similar or not. Second, there is a lack of empirical evidence on the relationship between political risk and establishment mode choice in the case of Indian MNCs. To fill this gap, the first aim of this paper is to analyze how cultural distance and political risk affect the establishment mode choice of Indian MNCs. Moreover, recognizing international experience to be an important factor in explaining international expansion, we focus on international experience interactions with sources of uncertainty inherent in the host market.

Cross-sectional study of female sex workers in Soweto, South Africa: Factors associated with HIV infection.

IntroductionIn South Africa, the rate of HIV in the sex worker (SW) population is exceedingly high, but critical gaps exist in our understanding of SWs and the factors that make them vulnerable to HIV. This study aimed to estimate HIV prevalence among female sex workers (FSWs) in Soweto, South Africa, and to describe their sexual behavior and other factors associated with HIV infection.MethodsA cross-sectional, respondent-driven sampling (RDS) recruitment methodology was used to enroll 508 FSWs based in Soweto. Data were collected using a survey instrument, followed by two HIV rapid tests. Raw and RDS adjusted data were analyzed using a chi-squared test of association and multivariate logistic regression to show factors associated with HIV infection.FindingsHIV prevalence among FSWs was 53.6% (95% CI 47.5–59.9). FSWs were almost exclusively based in taverns (85.6%) and hostels (52.0%). Less than a quarter (24.4%) were under 25 years of age. Non-partner violence was reported by 55.5%, 59.6% of whom were HIV-infected. Advancing age, incomplete secondary schooling, migrancy and multiple clients increased the likelihood of HIV acquisition: >30 years of age was associated with a 4.9 times (95% CI 2.6–9.3) increased likelihood of HIV; incomplete secondary schooling almost tripled the likelihood (AOR 2.8, 95% CI 1.6–5.0); being born outside of the Gauteng province increased the likelihood of HIV 2.3 times (95% CI 1.3–4.0); and having more than five clients per day almost doubled the likelihood (AOR 1.9, 95% CI 1.1–3.2).ConclusionOur findings highlight the extreme vulnerability of FSWs to HIV. Advancing age, limited education and multiple clients were risk factors associated with HIV, strongly driven by a combination of structural, biological and behavioral determinants. Evidence suggests that interventions need to be carefully tailored to the varying profiles of SW populations across South Africa. Soweto could be considered a microcosm of South Africa in terms of the epidemic of violence and HIV experienced by the SW population, which is influenced by factors often beyond an individual level of control. While describing a hitherto largely undocumented population of FSWs, our findings confirm the urgent need to scale up innovative HIV prevention and treatment programs for this population.

New Venture Teams and Acquisition: Team Composition Matters

Acquisition is often one of the most coveted exit paths by entrepreneurs. As the acquisition market continues to entice both sellers (entrepreneurs and investors) and buyers, identifying the determinants of these acquisitions is an important research area for entrepreneurship scholars. Combining upper echelons theory with insights from similarity-attraction theory and information processing theory, this study examines the relationship between the composition of new venture founder teams (NVTs) and acquisition likelihood; a relationship that has received little attention in prior literature. The sample analyzed is from the Kauffman Firm Survey of US new ventures started in 2004 and tracked annually through 2011. We find that gender diversity and the average education level of team members are positively related to acquisition likelihood. In addition, our results indicate a negative effect from the presence of founders born outside of the US and the diversity of industry experience on acquisition likelihood. We find no relationship between race diversity and education level diversity on acquisition likelihood. This study provides insight into the significant role of the founder characteristics in team-founded ventures as it relates to acquisition likelihood and the results may be of interest to both founders and external investors.

The Role of Technology Complementarity and Technology Similarity in Corporate Venture Capital

Drawing on the learning perspective, we examine the role of technology complementarity (TC) and technology similarity (TS) in corporate venture capital (CVC). We conceptualize a twofold strategy for portfolio companies: On the one hand, they can attract the interest of corporate investors by offering TC and TS, leading to the formation of CVC relationships; on the other hand, they can benefit from the learning associated with TC and TS, thus leading to their choice of different exit modes. We found that TC and TS have different impacts on the formation of CVC relationships. We also found that TC and TS influence the likelihood of IPO and acquisition differently.