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Article: Directors' and officers' liability insurance and acquisition outcomes

TitleDirectors' and officers' liability insurance and acquisition outcomes
Authors
KeywordsDirectors' And Officers' Liability Insurance
Mergers And Acquisitions
Issue Date2011
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jfec
Citation
Journal Of Financial Economics, 2011, v. 102 n. 3, p. 507-525 How to Cite?
AbstractWe examine the effect of directors' and officers' liability insurance (D&O insurance) on the outcomes of merger and acquisition (M&A) decisions. We find that acquirers whose executives have a higher level of D&O insurance coverage experience significantly lower announcement-period abnormal stock returns. Further analyses suggest that acquirers with a higher level of D&O insurance protection tend to pay higher acquisition premiums and their acquisitions appear to exhibit lower synergies. The evidence provides support for the notion that the provision of D&O insurance can induce unintended moral hazard by shielding directors and officers from the discipline of shareholder litigation. © 2011 Elsevier B.V.
Persistent Identifierhttp://hdl.handle.net/10722/188469
ISSN
2015 Impact Factor: 3.541
2015 SCImago Journal Rankings: 9.920
SSRN
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorLin, Cen_US
dc.contributor.authorOfficer, MSen_US
dc.contributor.authorZou, Hen_US
dc.date.accessioned2013-09-03T04:07:45Z-
dc.date.available2013-09-03T04:07:45Z-
dc.date.issued2011en_US
dc.identifier.citationJournal Of Financial Economics, 2011, v. 102 n. 3, p. 507-525en_US
dc.identifier.issn0304-405Xen_US
dc.identifier.urihttp://hdl.handle.net/10722/188469-
dc.description.abstractWe examine the effect of directors' and officers' liability insurance (D&O insurance) on the outcomes of merger and acquisition (M&A) decisions. We find that acquirers whose executives have a higher level of D&O insurance coverage experience significantly lower announcement-period abnormal stock returns. Further analyses suggest that acquirers with a higher level of D&O insurance protection tend to pay higher acquisition premiums and their acquisitions appear to exhibit lower synergies. The evidence provides support for the notion that the provision of D&O insurance can induce unintended moral hazard by shielding directors and officers from the discipline of shareholder litigation. © 2011 Elsevier B.V.en_US
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jfecen_US
dc.relation.ispartofJournal of Financial Economicsen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsNOTICE: this is the author’s version of a work that was accepted for publication in Journal of Financial Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in PUBLICATION, [VOL 102, ISSUE 3, (2011)] DOI 10.1016/j.jfineco.2011.08.004-
dc.subjectDirectors' And Officers' Liability Insuranceen_US
dc.subjectMergers And Acquisitionsen_US
dc.titleDirectors' and officers' liability insurance and acquisition outcomesen_US
dc.typeArticleen_US
dc.identifier.emailZou, H: hongzou@hku.hken_US
dc.identifier.authorityZou, H=rp01800en_US
dc.description.naturepostprinten_US
dc.identifier.doi10.1016/j.jfineco.2011.08.004en_US
dc.identifier.scopuseid_2-s2.0-82455199081en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-82455199081&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume102en_US
dc.identifier.issue3en_US
dc.identifier.spage507en_US
dc.identifier.epage525en_US
dc.identifier.isiWOS:000296598500003-
dc.publisher.placeNetherlandsen_US
dc.identifier.ssrn1641645-
dc.identifier.scopusauthoridLin, C=25630694300en_US
dc.identifier.scopusauthoridOfficer, MS=6507728699en_US
dc.identifier.scopusauthoridZou, H=48663306300en_US

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