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The value of CEOs' supply chain experience: Evidence from mergers and acquisitions
Journal article   Peer reviewed

The value of CEOs' supply chain experience: Evidence from mergers and acquisitions

Eliezer M. Fich and Tu Nguyen
Journal of corporate finance (Amsterdam, Netherlands), v 60, 101525
Feb 2020
DOI: https://doi.org/10.1016/j.jcorpfin.2019.101525

Abstract

Acquisitions Bargaining Supply chain Synergies Value creation
Acquirer CEOs with experience in the target's industry supply chain (‘supply chain CEOs’) are associated with wealth effects of first-order importance: they earn 1.5% higher merger announcement returns. Conversely, their targets get a lower share of the merger gains. Acquisitions by supply chain CEOs also exhibit higher synergies, better post-deal accounting performance, and less goodwill written off. These findings withstand checks for endogeneity, anticipation bias, and numerous robustness tests. In takeovers by supply chain CEOs, superior acquirer performance stems from both value creation and rents negotiated away from target shareholders. •Acquirers with CEOs experienced in the target’s supply chain (supply chain CEOs) earn 1.5% higher announcement returns.•Better integrated merger firms and the bargaining of better terms explain the higher returns.•Deals by supply chain CEOs exhibit higher synergies, higher post-deal accounting returns, and less goodwill written off.•Target firms of supply chain CEOs get a lower share of the merger gains.

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12 Record Views
28 citations in Web of Science
27 citations in Scopus

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Domestic collaboration
International collaboration
Web of Science research areas
Business, Finance
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