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Earnout financing in the financial services industry
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dc.contributor.author | Barbopoulos, Leonidas G. | |
dc.contributor.author | Molyneux, Phil | |
dc.contributor.author | Wilson, John O.S. | |
dc.date.accessioned | 2018-01-27T00:31:23Z | |
dc.date.available | 2018-01-27T00:31:23Z | |
dc.date.issued | 2016-10 | |
dc.identifier | 244565624 | |
dc.identifier | 376d2b36-c9d3-4717-80f7-05e2a08dd999 | |
dc.identifier | 84982784027 | |
dc.identifier | 000386056900012 | |
dc.identifier.citation | Barbopoulos , 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 . https://doi.org/10.1016/j.irfa.2016.07.001 | en |
dc.identifier.issn | 1057-5219 | |
dc.identifier.other | RIS: urn:AF3A0D583350A8ADDDA85BD06DFE8811 | |
dc.identifier.other | ORCID: /0000-0002-9554-9332/work/81797364 | |
dc.identifier.uri | https://hdl.handle.net/10023/12622 | |
dc.description.abstract | This 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.format.extent | 14 | |
dc.format.extent | 686686 | |
dc.language.iso | eng | |
dc.relation.ispartof | International Review of Financial Analysis | en |
dc.subject | Earnouts | en |
dc.subject | Acquisitions of financial institutions | en |
dc.subject | Propensity score matching | en |
dc.subject | Rosenbaum-bounds | en |
dc.subject | HG Finance | en |
dc.subject | BDC | en |
dc.subject.lcc | HG | en |
dc.title | Earnout financing in the financial services industry | en |
dc.type | Journal article | en |
dc.contributor.institution | University of St Andrews. School of Economics and Finance | en |
dc.contributor.institution | University of St Andrews. Centre for Responsible Banking and Finance | en |
dc.contributor.institution | University of St Andrews. School of Management | en |
dc.identifier.doi | 10.1016/j.irfa.2016.07.001 | |
dc.description.status | Peer reviewed | en |
dc.date.embargoedUntil | 2018-01-26 |
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