Management Practices and Takeover Decisions

Firms with good management practices optimize and synthesize human resources, leadership, technical conceptual skills to enhance firm value. In this paper, we examine the role of in merger acquisition (M&A) decisions. M&A decisions are among most important corporate decisions, on which firms spend a lot resources managerial qualities. We estimate as latent variable using structural equation production model Bayesian techniques. The key advantage approach is use informative priors from survey-based estimation methods, however available for limited number firms. Subsequently, effect takeover events. first show that practices, average, increase probability deals. However, also uncover nonlinear U-shaped effect, consistent theoretical premise poor leads many value-decreasing deals, whereas value-increasing