Publication:
When theory doesn't meet practice: Do firms really stage their investments?

Simple item page
dc.contributor.authorMoschieri, Caterina
dc.contributor.authorRagozzino, Roberto
dc.contributor.funderPortuguese Foundation for Science and Technology
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2024-11-26T16:26:58Z
dc.date.available2024-11-26T16:26:58Z
dc.date.issued2013-11-08
dc.description.abstractTheory has often discussed the benefits of adopting a staged investment strategy in mergers and acquisitions when investments hold uncertain prospects. Specifically, firms should enter into a cooperative agreement, such as a strategic alliance, before they eventually decide to buy out a partner. In this paper, we first review the theoretical arguments supporting such an approach and then provide evidence showing that staged investments in mergers and acquisitions are far less frequent than theory predicts. We analyze a sample of 24,495 global transactions that occurred between 1995 and 2010 and find that firms stage mergers and acquisitions in only 1.26% of all deals. This figure changes little after we control for transaction- and environmental-level considerations. We propose several explanations of why staged investments are seldom used in practice, despite their theoretical properties.
dc.description.peerreviewedyes
dc.description.statusPublished
dc.formatapplication/pdf
dc.identifier.citationRagozzino, R., & Moschieri, C. (2014). When theory doesn't meet practice: Do firms really stage their investments?. Academy of Management perspectives, 28(1), 22-37. https://doi.org/10.5465/amp.2011.0110
dc.identifier.doihttps://doi.org/10.5465/amp.2011.0110
dc.identifier.issn1943-4529
dc.identifier.officialurlhttps://journals.aom.org/doi/10.5465/amp.2011.0110
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3359
dc.issue.number1
dc.journal.titleAcademy of Management Perspectives
dc.language.isoen
dc.page.final37
dc.page.initial22
dc.page.total16
dc.publisherAcademy of Management
dc.relation.departmentStrategy
dc.relation.entityIE University
dc.relation.projectID#PTDC/ EGE-GES/110805/2009
dc.relation.schoolIE Business School
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subject.keywordInvestments
dc.subject.keywordStrategic alliance
dc.subject.keywordMergers
dc.subject.keywordAcquisitions
dc.titleWhen theory doesn't meet practice: Do firms really stage their investments?
dc.typeinfo:eu-repo/semantics/article
dc.version.typeinfo:eu-repo/semantics/publishedVersion
dc.volume.number28
dspace.entity.typePublication
relation.isAuthorOfPublicationb3ca6f94-dc17-4397-a8c9-3b25280fafe8
relation.isAuthorOfPublication.latestForDiscoveryb3ca6f94-dc17-4397-a8c9-3b25280fafe8
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
When_Theory_Doesnt_Meet_Practice_Do_Firm.pdf
Size:
486.66 KB
Format:
Adobe Portable Document Format
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
2.83 KB
Format:
Item-specific license agreed to upon submission
Description:
Download
Collections
Research Articles