Do CEOs with elite education matter? Evidence from shareholder value in mergers and acquisitions

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

Pacific-Basin Finance Journal Pub Date : 2025-01-09 DOI:10.1016/j.pacfin.2025.102668

Thi Bao Ngoc Nguyen , Dun-Yao Ke , Xuan-Qi Su

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引用次数: 0

Abstract

This study tests the influence of acquiring firms' CEOs with elite education—graduating from prestigious institutions—on shareholder value in mergers and acquisitions (M&A). Utilizing a manually compiled dataset of Taiwanese firms from 2007 to 2020, we find that firms led by elite-educated CEOs, particularly those with advanced degrees in engineering and technology, experience significantly positive M&A announcement-period returns. These results remain robust across alternative tests, addressing concerns about sample selection and endogeneity. Further analysis highlights that CEO attributes, such as prior M&A experience, shorter tenure, or advanced age, amplify the positive influence of elite education. Additionally, firms led by elite-educated CEOs demonstrate stronger growth opportunities, better credit quality, and lower capital costs, aligning with the Managerial Growth Potential and Trustworthiness Hypothesis. Lastly, elite educational ties between acquiring and target firm CEOs enhance trust and communication, further boosting M&A returns, consistent with the Information Communication Hypothesis. Overall, our pioneering work underscores the critical role of leadership's educational pedigree in driving successful corporate acquisitions.

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来源期刊

Pacific-Basin Finance Journal BUSINESS, FINANCE-

CiteScore

6.80

自引率

6.50%

发文量

157

期刊介绍： The Pacific-Basin Finance Journal is aimed at providing a specialized forum for the publication of academic research on capital markets of the Asia-Pacific countries. Primary emphasis will be placed on the highest quality empirical and theoretical research in the following areas: • Market Micro-structure; • Investment and Portfolio Management; • Theories of Market Equilibrium; • Valuation of Financial and Real Assets; • Behavior of Asset Prices in Financial Sectors; • Normative Theory of Financial Management; • Capital Markets of Development; • Market Mechanisms.