Featured Research

from universities, journals, and other organizations

Women directors better at mergers, acquisitions

Date:
November 25, 2013
Source:
University of British Columbia
Summary:
The more women there are on a corporate board the less a company pays for its acquisitions, according to a new study.

Kai Li is a finance professor at the Sauder School of Business and an author of the study.
Credit: UBC

The more women there are on a corporate board the less a company pays for its acquisitions, according to a new study by researchers at UBC's Sauder School of Business.

The forthcoming Journal of Corporate Finance paper shows the cost of a successful acquisition is reduced by 15.4 per cent with each female director added on a board. It also reveals that each additional female director reduces the number of a company's attempted takeover bids by 7.6 per cent.

"Female board members play a significant role in mitigating the empire-building tendency of CEOs through the acquisition of other companies." says Sauder finance professor Kai Li, who co-authored the study. "On average, merger and acquisition transactions don't create shareholder value, so women are having a real impact in protecting shareholder investment and overall firm performance."

The researchers say their results suggest women are less interested in pursuing risky transactions and require the promise of a higher return on investment.

For the study, the researchers analyzed a large sample of acquisition bids made by S&P 1500 companies in the United States between 1997 and 2009.

To determine the cost of the acquisitions, the researchers looked at the bid premium -- the difference between the final offer price and the stock price of the targeted firm before the deal was signed. These figures were then correlated with the number of women directors on the various boards.

"Our findings show that the prudence exhibited by women directors in negotiating mergers and acquisitions has had a substantial positive effect on maintaining firm value," say Professor Li. "This finding adds fire and force to recent calls to mandate a minimum number of women on the boards of publicly traded companies."


Story Source:

The above story is based on materials provided by University of British Columbia. Note: Materials may be edited for content and length.


Journal Reference:

  1. Maurice D. Levi, Kai Li, Feng Zhang. Men are from Mars, Women are from Venus: Director Gender and Mergers and Acquisitions. SSRN Electronic Journal, 2012; DOI: 10.2139/ssrn.2054709

Cite This Page:

University of British Columbia. "Women directors better at mergers, acquisitions." ScienceDaily. ScienceDaily, 25 November 2013. <www.sciencedaily.com/releases/2013/11/131125091629.htm>.
University of British Columbia. (2013, November 25). Women directors better at mergers, acquisitions. ScienceDaily. Retrieved July 23, 2014 from www.sciencedaily.com/releases/2013/11/131125091629.htm
University of British Columbia. "Women directors better at mergers, acquisitions." ScienceDaily. www.sciencedaily.com/releases/2013/11/131125091629.htm (accessed July 23, 2014).

Share This




More Science & Society News

Wednesday, July 23, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Boeing Ups Outlook on 52% Profit Jump

Boeing Ups Outlook on 52% Profit Jump

Reuters - Business Video Online (July 23, 2014) Commercial aircraft deliveries rose seven percent at Boeing, prompting the aerospace company to boost full-year profit guidance- though quarterly revenues missed analyst estimates. Bobbi Rebell reports. Video provided by Reuters
Powered by NewsLook.com
9/11 Commission Members Warn of Terror "fatigue" Among American Public

9/11 Commission Members Warn of Terror "fatigue" Among American Public

Reuters - US Online Video (July 22, 2014) Ten years after releasing its initial report, members of the 9/11 Commission warn of the "waning sense of urgency" in combating terrorists attacks. Mana Rabiee reports. Video provided by Reuters
Powered by NewsLook.com
CDC Head Concerned About a Post-Antibiotic Era

CDC Head Concerned About a Post-Antibiotic Era

AP (July 22, 2014) Sounding alarms about the growing threat of antibiotic resistance, CDC Director Tom Frieden warned Tuesday if the global community does not confront the problem soon, the world will be living in a devastating post-antibiotic era. (July 22) Video provided by AP
Powered by NewsLook.com
Raw: First Lady Says `Drink Up' More Water

Raw: First Lady Says `Drink Up' More Water

AP (July 22, 2014) First lady Michelle Obama, along with help from some children, unveiled a temporary sign on the White House's South Lawn. It's part of her initiative to get Americans to drink more water. (July 22) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins