Poor Industry Conditions as an External Disciplining Mechanism in Takeovers
研究发现，收购方所在行业的不景气能约束管理层，促使其更关注创造股东价值的交易，从而提升并购公告的异常回报。
ABSTRACT Research Question/Issue Many mergers destroy shareholder value because managers waste corporate resources to pursue private benefits. This paper considers poor conditions in the acquirer industry as a novel external disciplining mechanism that mitigates agency problems in takeovers. Research Findings/Insights Using textual analysis, we build a new measure of industry conditions based on acquirer peers' 10‐K statements. We link this measure to acquirer announcement abnormal returns and find that more negative industry conditions are associated with higher abnormal returns. Theoretical/Academic Implications Our results suggest that poor industry conditions impose discipline on managers who then tend to focus on deals that create value for acquirer shareholders. Practitioner/Policy Implications Shareholders can rely on better alignment of interests with their managers during poorer industry conditions.