Investors' time preferences and takeover performance

Wolfgang Breuer , Bushra Ghufran , Astrid Juliane Salzmann (1)

1 LEM - Lille économie management - UMR 9221

We investigate investors' time preferences and takeover outcomes in a cross-disciplinary international study. We use a cultural measure on long-term orientation (LTO) to capture investors' time preferences. Additionally, we study how investor protection and the nature of the deal (cross-border vs domestic) in connection with investors' time preferences come into play in explaining long-term takeover performance. Evaluating data on 38,153 M&A deals from 54 countries, over the period from 2000 to 2015, we offer empirical evidence that investors' future orientation significantly improves post-M&A performance, while short-term oriented behavior deteriorates takeover performance. Our findings further suggest that the positive impact of investors' future orientation on takeover performance is more pronounced in countries with strong investor protection. Moreover, the impact of investors' time preferences is stronger for domestic deals where the confounding impact of cultural differences is almost non-existent.

Mots clés: Future orientation; Investors' time preferences; Mergers and acquisitions; Takeover performance; Investor protection

Domaines: Sciences de l'Homme et Société; Gestion et management

Wolfgang Breuer, Bushra Ghufran, Astrid Juliane Salzmann. Investors' time preferences and takeover performance. International Review of Financial Analysis, 2020, 67, pp.101435. ⟨10.1016/j.irfa.2019.101435⟩. ⟨hal-02508909⟩