Practice makes perfect? The effect of CEO and director experience on acquisition performance

摘要

This study replicates and extends the results of Field and Mkrtchyan, who find that independent directors' prior acquisition experience improves succeeding acquisition performance. First, using both the original and an extended sample period, we confirm their findings. Second, we extend their study by considering the effect of prior acquisition experience gained by the CEO as an executive or independent director. Similar to the effect documented for independent directors, we find that CEOs' acquisition experience is positively associated with subsequent acquisition performance. Consistent with CEO learning, we document a greater effect on subsequent takeover performance when acquisition experience is negative.