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.

Related Articles


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 October 30, 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 October 30, 2014).

Share This



More Science & Society News

Thursday, October 30, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Obama: The US Will Not 'run and Hide' From Ebola

Obama: The US Will Not 'run and Hide' From Ebola

AP (Oct. 29, 2014) Surrounded by health care workers in the White House East Room, President Barack Obama said the U.S. will likely see additional Ebola cases in the weeks ahead. But he said the nation can't seal itself off in the fight against the disease. (Oct. 29) Video provided by AP
Powered by NewsLook.com
Lowe's Testing Robot Sales Assistants in California Store

Lowe's Testing Robot Sales Assistants in California Store

Buzz60 (Oct. 29, 2014) Lowe’s is testing out what it’s describing as a robotic shopping assistant in one of its Orchard Supply Hardware Stores in California. Jen Markham explains. Video provided by Buzz60
Powered by NewsLook.com
States And White House Disagree On Ebola Quarantines

States And White House Disagree On Ebola Quarantines

Newsy (Oct. 29, 2014) Officials in New Jersey and Maine have quarantined Doctors Without Borders nurse Kaci Hickox, a move the White House doesn't seem to support. Video provided by Newsy
Powered by NewsLook.com
New Wave of Online Delivery Gains Momentum

New Wave of Online Delivery Gains Momentum

AFP (Oct. 29, 2014) With start-ups like Postmates offering quick delivery of meals, groceries and other items through a smartphone app, the online world is delivering again. Duration: 01:39 Video provided by AFP
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:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

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