Show simple item record

Files in this item


Item metadata

dc.contributor.authorBarbopoulos, Leonidas G.
dc.contributor.authorMolyneux, Phil
dc.contributor.authorWilson, John O.S.
dc.identifier.citationBarbopoulos , L G , Molyneux , P & Wilson , J O S 2016 , ' Earnout financing in the financial services industry ' , International Review of Financial Analysis , vol. 47 , pp. 119-132 .
dc.identifier.otherPURE: 244565624
dc.identifier.otherPURE UUID: 376d2b36-c9d3-4717-80f7-05e2a08dd999
dc.identifier.otherRIS: urn:AF3A0D583350A8ADDDA85BD06DFE8811
dc.identifier.otherScopus: 84982784027
dc.identifier.otherWOS: 000386056900012
dc.identifier.otherORCID: /0000-0002-9554-9332/work/81797364
dc.description.abstractThis paper explores the effects of earnout contracts used in US financial services M&A. We use propensity score matching (PSM) to address selection bias issues with regard to the endogeneity of the decision of financial institutions to use such contracts. We find that the use of earnout contracts leads to significantly higher acquirer abnormal (short- and long-run) returns compared to counterpart acquisitions (control deals) which do not use such contracts. The larger the size of the deferred (earnout) payment, as a fraction of the total transaction value, the higher the acquirers’ gains in the short- and long-run. Both acquirer short- and long-run gains increase when the management team of the target institution is retained in the post-acquisition period.
dc.relation.ispartofInternational Review of Financial Analysisen
dc.rights© 2016 Elsevier Inc. All rights reserved. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at
dc.subjectAcquisitions of financial institutionsen
dc.subjectPropensity score matchingen
dc.subjectHG Financeen
dc.titleEarnout financing in the financial services industryen
dc.typeJournal articleen
dc.contributor.institutionUniversity of St Andrews. School of Economics and Financeen
dc.contributor.institutionUniversity of St Andrews. Centre for Responsible Banking and Financeen
dc.contributor.institutionUniversity of St Andrews. School of Managementen
dc.description.statusPeer revieweden

This item appears in the following Collection(s)

Show simple item record