Proceedings of the 3rd Annual 2017 International Conference on Management Science and Engineering (MSE 2017)

Mergers Leverage Dynamics and Post-Merger Integration Duration

Authors
Yao Cheng
Corresponding Author
Yao Cheng
Available Online October 2017.
DOI
10.2991/mse-17.2017.63How to use a DOI?
Keywords
post-merger integration duration, leverage, method of payment
Abstract

This paper examines the effects of the post-merger integration duration on acquiring rms' leverage behavior before and after a merger, using a dynamic model in which full merger benefits cannot be consumed at the instant of a merger, but rather after a pre-specialized post-merger integration period. The model generates new implications related toacquiring rms' leverage dynamics along with method of payment choice. Specifically, the model indicates that the post-merger integration duration is negatively associated with themarket leverage of newly-merged rms at the time of merger completion and during theintegration period. Further, acquirer managers are more likely to use equity to finance a merger when the integration duration is likely to be lengthy. Our empirical tests provide evidence consistent with the model implications.

Copyright
© 2017, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 3rd Annual 2017 International Conference on Management Science and Engineering (MSE 2017)
Series
Advances in Economics, Business and Management Research
Publication Date
October 2017
ISBN
978-94-6252-394-4
ISSN
2352-5428
DOI
10.2991/mse-17.2017.63How to use a DOI?
Copyright
© 2017, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Yao Cheng
PY  - 2017/10
DA  - 2017/10
TI  - Mergers Leverage Dynamics and Post-Merger Integration Duration
BT  - Proceedings of the 3rd Annual 2017 International Conference on Management Science and Engineering (MSE 2017)
PB  - Atlantis Press
SP  - 270
EP  - 274
SN  - 2352-5428
UR  - https://doi.org/10.2991/mse-17.2017.63
DO  - 10.2991/mse-17.2017.63
ID  - Cheng2017/10
ER  -