Do early birds get the returns? An empirical investigation of early-mover advantages in acquisitions

  • Carow K
  • Heron R
  • Saxton T
  • 193

    Readers

    Mendeley users who have this article in their library.
  • 115

    Citations

    Citations of this article.

Abstract

We explore whether pioneering advantages exist for early-mover acquirers in industry acquisition waves by examining both combined (target and acquirer) and acquirer stock returns. Combined abnormal returns are higher for acquisitions that occur at the beginning of acquisition waves. However, for acquirers’ returns, only strategic pioneers—those acting in manners consistent with having superior information—capture significant advantages. Specifically, early-mover acquirers who realize superior stock returns are those that conduct acquisitions in related industries, during industry expansionary phases, and finance their acquisitions as financial theory suggests they should when they possess an informational advantage—with cash. Our findings extend the first-mover literature to corporate practices and link these practices to acquisition returns

Author-supplied keywords

  • Acquisitions
  • First-mover advantage
  • Market returns
  • Resource-based view

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Authors

  • Kenneth Carow

  • Randall Heron

  • Todd Saxton

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free