Title

The wealth effects of board composition and ownership structure in international acquisitions.

SelectedWorks Author Profiles:

Sridhar Sundaram

Document Type

Book Chapter

Publication Date

2001

ISBN

9781849500746

Abstract

This paper examines the association between board composition, ownership structure, and the shareholder wealth of bidding U.S. firms in international acquisitions. Foreign acquisitions represent major investment proposals that demand the involvement of the board in the decision-making process. Hence, the international acquisition process provides a good vehicle to examine the efficacy of the board of directors. Consistent with other studies, our results indicate that U.S. bidders experience significant negative wealth effects at the announcement of the acquisition. In addition, we find that wealth effects are significantly and positively related to board size and to share ownership by independent outside directors and inside directors. Sub-samples based on board size reveal that for small boards, share ownership by directors is significantly related to abnormal returns only for insider dominated boards. For large boards, ownership by independent outside directors is significantly related to abnormal returns only for outsider dominated boards.

Language

en_US

Publisher

Emerald Group Publishing Ltd.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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