Merger performance and managerial incentives

by Matthias Kräkel and Daniel Müller

We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low synergies - even when targets with high synergies are available - to obtain high-powered incentives and, hence, a high personal income at the merger-management stage.

MoreLess

Year of publication:	November 2014
Authors:	Kräkel, Matthias ; Müller, Daniel
Publisher:	Bonn : Graduate School of Economics
Subject:	acquisition \| merger \| moral hazard \| Theorie \| Theory \| Fusion \| Merger \| Moral Hazard \| Moral hazard \| Übernahme \| Takeover \| Führungskräfte \| Managers \| Leistungsanreiz \| Performance incentive \| Prinzipal-Agent-Theorie \| Agency theory \| Anreiz \| Incentives \| Unternehmenserfolg \| Firm performance

freely available

Full text |

More access options

Check Google Scholar

In German libraries (KVK)

I need help

Extent:	1 Online-Ressource (circa 39 Seiten) Illustrationen
Series:	Bonn Econ Discussion Papers / BGSE. - Bonn : Univ., ZDB-ID 2124986-6. - Vol. 2014/02
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Other identifiers:	hdl:10419/128614 [Handle]
Classification:	D82 - Asymmetric and Private Information ; D86 - Economics of Contract: Theory ; G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011430291