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The Role of Corporate Political Strategies in M&As

Croci, E, Pantzalis, C, Park, JC and Petmezas, Dimitris (2017) The Role of Corporate Political Strategies in M&As Journal of Corporate Finance, 43. pp. 260-287.

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Abstract

In line with the view that politics can complicate M&A deals, we find that firms contributing to political action committees or involved in lobbying are less likely to be acquired and their takeover process is lengthier. As we empirically show, this can be explained by the fact that politicians have motives to interfere with the takeover process due to career concerns, in terms of getting re-elected and raising funds for future campaigns. We also document that politically connected target firms command higher takeover premiums from bidders lacking political expertise, consistent with the notion that the market regards target firms’ connections, not easily replicable by bidders, as means to enhance growth opportunities of the merged firm.

Item Type: Article
Subjects : Surrey Business School
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
NameEmailORCID
Croci, EUNSPECIFIEDUNSPECIFIED
Pantzalis, CUNSPECIFIEDUNSPECIFIED
Park, JCUNSPECIFIEDUNSPECIFIED
Petmezas, DimitrisD.Petmezas@surrey.ac.ukUNSPECIFIED
Date : 27 January 2017
Identification Number : 10.1016/j.jcorpfin.2017.01.009
Copyright Disclaimer : © 2017. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords : PAC contribution; lobbying activity; merger and acquisition; acquisition probability; time to completion; takeover premium
Related URLs :
Depositing User : Symplectic Elements
Date Deposited : 22 Feb 2017 14:41
Last Modified : 19 Jul 2017 10:59
URI: http://epubs.surrey.ac.uk/id/eprint/813603

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