Highly connected CEOs more likely to broker mergers and acquisitions that harm firms
Monday, October 20, 2014 - 08:01
in Mathematics & Economics
Chief executive officers with extensive social connections to board members, executives at other firms, bankers and other financial market participants initiate mergers and acquisitions more frequently and with poorer results, according to a new study by a University of Arkansas researcher. And, when compared to deals brokered by CEOs with less-extensive contacts, these deals result in greater financial losses for both the acquiring firm and the combined entity but greater personal benefit to the well connected CEO.