Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/112926
Authors: 
Stimmelmayr, Michael
Liberini, Federica
Russo, Antonio
Year of Publication: 
2015
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Financial Economics IV D10-V1
Abstract: 
Ownership takeovers often follow complex strategies where the control of the target firm is acquired through a sequence of independent contracts. We study the role of capital gain taxes on the contract structure and on the method of finance of merger and acquisitions (M&As). We find that capital gain taxes discourage cash-to-stock transactions and that this effect is stronger in sequential acquisitions. In addition, we show that capital gain taxes promote sequential acquisitions and thus carry a beneficial welfare effect by avoiding the waste of productive resources due to unprofitable mergers. We provide empirical support for the model predictions by estimating a bivariate probit on a sample of acquisition contracts collected from the Thomson Financial SDC database.
JEL: 
G34
H25
C35
Document Type: 
Conference Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.