Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330740 
Authors: 
Year of Publication: 
2024
Citation: 
[Journal:] Management Review Quarterly [ISSN:] 2198-1639 [Volume:] 75 [Issue:] 3 [Publisher:] Springer International Publishing [Place:] Cham [Year:] 2024 [Pages:] 2107-2146
Publisher: 
Springer International Publishing, Cham
Abstract: 
Defining the deal value in mergers and acquisitions is inherently complex and often constitutes an inflection point for the parties involved. By paying part of the deal value at a later stage according to predefined goals, earnouts are intended to alleviate information asymmetries and help bridge valuation differences. Despite their wide application in practice, research on earnouts remains fragmented. This study presents the first systematic literature review of earnouts, mapping the scattered research landscape by analyzing 64 papers published between 1970 and 2023. The review categorizes the body of earnout research into three distinct streams: the motives for employing earnouts, their implications, and the nuances of their contractual arrangements. Based on this synthesis, research gaps are identified that present a comprehensive road map for future research. This study enables investors to employ earnouts more successfully and guides scholars to pursue further earnout research based on its holistic overview.
Subjects: 
Earnout
Mergers and acquisitions
Contingent payments
Performance commitment
Contingent claims
Information asymmetries
Systematic literature review
JEL: 
G34
G32
G13
D82
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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