Title: Examining the influence of managerial ownership on M&A transactions by acquirers from the emerging markets

Authors: Emmanuel Okofo-Dartey; Lungile Ntsalaze

Addresses: Department of Financial Intelligence, College of Accounting Sciences, University of South Africa, 07000, South Africa ' Department of Financial Intelligence, College of Accounting Sciences, University of South Africa, 07000, South Africa

Abstract: Emerging market firms have served mainly as targets rather than acquirers in mergers and acquisitions (M&As) transactions. However, this trend appears to be changing because some firms from the emerging markets are becoming more active in M&A deals as acquirers. Several factors except managerial ownership are highlighted in the literature as the driving forces of M&As by acquirers from the emerging markets. Therefore, this study investigates whether managerial ownership motivates these acquirers to undertake acquisitions, and influences them to pursue smaller-sized targets in their deals. Using the probit regression methodology and data of 160 listed acquirers from ten emerging markets sourced from the Bloomberg terminal from 2004 to 2013, the study reveals that managerial ownership of acquirers from the emerging markets does not influence them to undertake M&As and also become interested in smaller targets. However, the acquirers' debt levels are more likely to influence their M&A execution decisions.

Keywords: managerial ownership; emerging market; acquirers; probit regression; target firms; the theory of managerial entrenchment.

DOI: 10.1504/IJTGM.2021.10040090

International Journal of Trade and Global Markets, 2022 Vol.15 No.2, pp.167 - 185

Received: 12 Apr 2020
Accepted: 08 Jul 2020

Published online: 10 Mar 2022 *

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