M&A activity and the capital structure of target firms

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F67985998%3A_____%2F23%3A00582613" target="_blank" >RIV/67985998:_____/23:00582613 - isvavai.cz</a>
Alternative codes found
RIV/00216208:11640/23:00575062 RIV/62156489:43110/23:43921513
Result on the web
<a href="https://doi.org/10.1017/S0022109022000436" target="_blank" >https://doi.org/10.1017/S0022109022000436</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1017/S0022109022000436" target="_blank" >10.1017/S0022109022000436</a>

Result language
angličtina
Original language name
M&A activity and the capital structure of target firms
Original language description
We study 6,083 European firms that were acquired between 1999 and 2015. Soon after the acquisition, the acquired firms promptly and substantially close the gap between their actual leverage ratios and their target (optimal) ratios. Firms that were over- (under-) leveraged at the start of their acquisition year move their debt-to-assets ratio from 34.1% to 20% (10% to 18.5%) by the end of the following year. Under-leveraged firms expand their assets rapidly following acquisition, as they gain improved access to investable resources. Our results are consistent with the trade-off theory of capital structure and with the existence of firm-specific target leverage ratios.
Czech name
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Czech description
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Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
—
OECD FORD branch
50204 - Business and management

Project
<a href="/en/project/GA21-30822S" target="_blank" >GA21-30822S: Business Groups in Europe: The structure as a response to shareholder objectives and the business environment</a><br>
Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year
2023
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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