The Conversation: Black Death and the coronavirus

A new research paper entitled, “Institutional Cross-ownership and Corporate Strategy: The Case of Mergers and Acquisitions” by ICMA Centre academics, Professor Chris Brooks, Dr Yeqin Zeng, and former ICMA Centre PhD student Dr Zhong Chen, has recently been accepted by the Journal of Corporate Finance.

"Institutional Cross-ownership and Corporate Strategy: The Case of Mergers and Acquisitions" by Professor Chris Brooks, Dr Yeqin Zeng, and PhD Zhong Chen has been awarded Best Corporate Finance Paper at the 2016 Southern Finance Association annual conference. About the paper: The paper provides new evidence on the important role of institutional investors in affecting corporate strategy. We study institutional investors who hold stocks of both acquirers and targets before the announcements of mergers and acquisitions (M&As). The existence of these institutional cross-owners not only increases the probability of two firms merging, but also affects the outcomes of M&As. Institutional cross-ownership reduces target firm prices, lowers completion probabilities of deals with negative acquirer announcement returns, and increases the use of stock payment in M&A transactions. Furthermore, deals with high institutional cross-ownership have lower transaction costs and disclose more transparent financial statement information.

Congratulations to ICMA Centre PhD student Zilu Shang on the receipt of a Best Paper Award at the 7th Global Business and Social Science Research Conference (BSSRC).