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Jiang, Lin, Kling, Gerhard and Bo, Hong (2021) 'Does Executive Compensation affect Firms' Acquisition Decisions? Evidence from China.' Asia Pacific Business Review, 27 (5). pp. 731-748.

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Abstract

Exploiting regulatory changes in China that govern the use of stock options, we investigate whether executive compensation affects acquisition decisions and post-acquisition performance from 2005 to 2014. We find that acquisitions are not driven by stock options. Managerial stock ownership promotes acquisitions at low levels of ownership – but leads to less frequent acquisitions at higher levels, implying a non-linear relationship. Similarly, we also find a non-linear impact of managerial stock ownership on long-term post-acquisition performance. However, neither stock options nor stock ownership determine short-term post-acquisition performance. Finally, state ownership has a significant impact on the compensation-acquisition relationship in that the above relationships only exist in private enterprises.

Item Type: Journal Article
Keywords: Executive compensation, Merge & Acquisition
SOAS Departments & Centres: Departments and Subunits > School of Finance & Management
ISSN: 13602381
DOI (Digital Object Identifier): https://doi.org/10.1080/13602381.2020.1834736
Date Deposited: 12 Jan 2021 09:25
URI: https://eprints.soas.ac.uk/id/eprint/34676

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