Homebiased Acquisitions
نویسندگان
چکیده
We show that CEOs exhibit a home bias in acquisitions. Firms are over twice as likely to acquire targets located in their CEOs’ home states than similar targets domiciled elsewhere. The bias is strongest for private targets and when acquirer governance is lax, and these private home deals do not create value, suggesting that CEOs acquire these targets for their own benefits. Unlike typical public deals, however, public home-state acquisitions are value enhancing. CEOs create value in public home-state acquisitions by avoiding extremely poor deals and through synergies driven by efficient integration.
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