My Thesis: A Re-Examination of the Experience-Performance Relationship in M&A and an Inquiry into the Possible Moderating Effect of Executive Turnover
Want to outwit the opposition by understanding the dynamics behind successful M&A? My thesis dives deep into how experience, executive turnover, and performance interact to shape deals.
Abstract (click to fold out):
This study sets out to clear up the literature concerning the experience-performance relationship in M&A, adding the possible moderating effect of executive turnover to the discussion. The literature on the nature of the relationship between M&A experience and M&A performance is contradictory. This leads to the hypothesis of both an inverse U-shaped-, or U-shaped relationship. Furthermore, literature on the effects of turnover at the individual-, and group-level are used to hypothesize a possible moderating effect of executive turnover. Analysis of a sample consisting of 437 deals by S&P 500 acquirers spanning 173 companies in 39 distinct 2-digit SIC code industries with both U.S. and foreign targets fails to support hypotheses predicting both an inverse U-shaped-, or U-shaped relationship between M&A experience and M&A performance. Furthermore, hypotheses that predicted a moderating effect of executive turnover by way of a turning point shift to the right and flattening also have to be rejected. Lastly, academic-, and managerial implications alongside limitations and opportunities for future research are discussed.
