Table 5 Co-opted board and market...

Table 5

Co-opted board and market reactions to acquisition announcements: propensity score matching analysis

Panel A: mean differences between control and matched groups
	High DPCO_OPT (treated group)	Low DPCO_OPT (control group)		High DNCO_OPT (treated group)	Low DNCO_OPT (control group)		High DRCO_OPT (treated group)	Low DRCO_OPT (control group)
	Mean	Mean	p-value	Mean	Mean	p-value	Mean	Mean	p-value
SIZE	7.8237	7.8723	0.35	7.9474	8.0030	0.30	7.7550	7.7816	0.59
LEV	0.2327	0.2309	0.69	0.2346	0.2343	0.96	0.2371	0.2259	0.16
CASH	0.1503	0.1489	0.74	0.1434	0.1432	0.96	0.1492	0.1519	0.51
TOBINQ	1.9102	1.9893	0.23	1.9716	1.9534	0.64	1.9677	2.0533	0.26
ROA	0.0124	0.0162	0.34	0.0192	0.0195	0.93	0.0114	0.0184	0.18
CEO_DUALITY	0.5271	0.5262	0.94	0.5245	0.5120	0.35	0.5289	0.5251	0.75
LNCEO_TENURE	1.5708	1.5358	0.15	1.5450	1.5343	0.49	1.5830	1.5611	0.13
LNBOARD_SIZE	2.3956	2.4049	0.19	2.4212	2.4283	0.31	2.3836	2.3920	0.24
BOARD_INDEP	0.68611	0.6846	0.72	0.6884	0.6901	0.71	0.6786	0.6789	0.93
LNANALYSTS	1.9653	2.0024	0.12	2.0280	2.0443	0.53	1.9263	1.9939	0.15
RELATIVESIZE	0.2108	0.1959	0.11	0.2048	0.1914	0.18	0.2155	0.1929	0.12
ALLCASH	0.3009	0.3277	0.20	0.2939	0.3400	0.10	0.2955	0.3228	0.15
ALLSTOCK	0.1410	0.1342	0.42	0.1566	0.1299	0.15	0.1555	0.1384	0.14
RELATEDBID	0.5253	0.5293	0.74	0.5358	0.5402	0.74	0.5324	0.5410	0.48
TENDEROFFER	0.0620	0.0672	0.39	0.0607	0.0684	0.24	0.0596	0.0629	0.57
COMPETINGBID	0.0172	0.0324	0.00	0.0157	0.0336	0.00	0.0211	0.0291	0.04

Panel A: mean differences between control and matched groups
	High DPCO_OPT (treated group)	Low DPCO_OPT (control group)		High DNCO_OPT (treated group)	Low DNCO_OPT (control group)		High DRCO_OPT (treated group)	Low DRCO_OPT (control group)
	Mean	Mean	p-value	Mean	Mean	p-value	Mean	Mean	p-value
SIZE	7.8237	7.8723	0.35	7.9474	8.0030	0.30	7.7550	7.7816	0.59
LEV	0.2327	0.2309	0.69	0.2346	0.2343	0.96	0.2371	0.2259	0.16
CASH	0.1503	0.1489	0.74	0.1434	0.1432	0.96	0.1492	0.1519	0.51
TOBINQ	1.9102	1.9893	0.23	1.9716	1.9534	0.64	1.9677	2.0533	0.26
ROA	0.0124	0.0162	0.34	0.0192	0.0195	0.93	0.0114	0.0184	0.18
CEO_DUALITY	0.5271	0.5262	0.94	0.5245	0.5120	0.35	0.5289	0.5251	0.75
LNCEO_TENURE	1.5708	1.5358	0.15	1.5450	1.5343	0.49	1.5830	1.5611	0.13
LNBOARD_SIZE	2.3956	2.4049	0.19	2.4212	2.4283	0.31	2.3836	2.3920	0.24
BOARD_INDEP	0.68611	0.6846	0.72	0.6884	0.6901	0.71	0.6786	0.6789	0.93
LNANALYSTS	1.9653	2.0024	0.12	2.0280	2.0443	0.53	1.9263	1.9939	0.15
RELATIVESIZE	0.2108	0.1959	0.11	0.2048	0.1914	0.18	0.2155	0.1929	0.12
ALLCASH	0.3009	0.3277	0.20	0.2939	0.3400	0.10	0.2955	0.3228	0.15
ALLSTOCK	0.1410	0.1342	0.42	0.1566	0.1299	0.15	0.1555	0.1384	0.14
RELATEDBID	0.5253	0.5293	0.74	0.5358	0.5402	0.74	0.5324	0.5410	0.48
TENDEROFFER	0.0620	0.0672	0.39	0.0607	0.0684	0.24	0.0596	0.0629	0.57
COMPETINGBID	0.0172	0.0324	0.00	0.0157	0.0336	0.00	0.0211	0.0291	0.04

Panel B: propensity score matching regression results
	Panel A: first stage			Panel B: second stage
	(1)	(2)	(3)	(4)	(5)	(6)
	DPCO_OPT	DNCO_OPT	DRCO_OPT	CAR	CAR	CAR
PCO_OPT	–	–	–	−0.0068***	–	–
PCO_OPT				(−2.86)
NCO_OPT	–	–	–	–	−0.0007***	–
NCO_OPT					(−2.83)
RCO_OPT	–	–	–	–	–	−0.0057**
RCO_OPT						(−2.45)
SIZE	0.0149***	0.0084	0.0182***	−0.0016**	−0.0011	−0.0010
SIZE	(3.34)	(1.55)	(4.14)	(−2.36)	(−1.53)	(−1.49)
LEV	0.0154	0.0358	0.0152	0.0140***	0.0150***	0.0101**
LEV	(0.56)	(1.17)	(0.56)	(2.72)	(2.70)	(2.04)
CASH	0.0337	0.0505	0.0469	−0.0147**	−0.0082	−0.0167***
CASH	(0.89)	(1.21)	(1.21)	(−2.40)	(−1.23)	(−2.81)
TOBINQ	−0.0034	−0.0029	−0.0031	0.0023***	0.0024***	0.0025***
TOBINQ	(−0.81)	(−0.59)	(−0.74)	(3.35)	(3.40)	(4.09)
ROA	0.0515**	0.0726***	0.0396*	0.0096*	0.0148**	0.0104*
ROA	(2.46)	(2.73)	(1.89)	(1.77)	(2.43)	(1.94)
CEO_DUALITY	0.0142	0.0065	0.0136	0.0014	0.0018	0.0012
CEO_DUALITY	(1.35)	(0.54)	(1.30)	(0.82)	(0.98)	(0.70)
LNCEO_TENURE	−0.1874***	−0.1919***	−0.2127***	−0.0023	−0.0025	−0.0030*
LNCEO_TENURE	(−16.45)	(−15.17)	(−19.71)	(−1.27)	(−1.36)	(−1.70)
LNBOARD_SIZE	−0.0042	−0.1562***	−0.0038	0.0021	0.0028	−0.0000
LNBOARD_SIZE	(−0.22)	(−6.62)	(−0.21)	(0.55)	(0.62)	(−0.00)
BOARD_INDEP	0.0540*	0.0588*	0.0444	−0.0048	−0.0035	−0.0034
BOARD_INDEP	(1.71)	(1.72)	(1.48)	(−0.82)	(−0.55)	(−0.58)
LNANALYSTS	0.0227***	0.0285***	0.0242***	−0.0029**	−0.0040***	−0.0034***
LNANALYSTS	(3.79)	(4.28)	(4.20)	(−2.52)	(−3.17)	(−3.04)
RELATIVESIZE	–	–	–	0.0042*	0.0021	0.0030
RELATIVESIZE				(1.86)	(0.86)	(1.36)
ALLCASH	–	–	–	0.0018	0.0005	0.0033*
ALLCASH				(0.97)	(0.23)	(1.79)
ALLSTOCK	–	–	–	−0.0113***	−0.0114***	−0.0109***
ALLSTOCK				(−4.50)	(−4.29)	(−4.55)
RELATEDBID	–	–	–	0.0002	−0.0003	0.0005
RELATEDBID				(0.12)	(−0.18)	(0.29)
TENDEROFFER	–	–	–	−0.0027	−0.0034	−0.0052
TENDEROFFER				(−0.81)	(−0.93)	(−1.56)
COMPETINGBID	–	–	–	−0.0065	−0.0064	−0.0090*
COMPETINGBID				(−1.26)	(−1.15)	(−1.79)
CONSTANT	0.0635	0.4850***	0.3755***	0.0696*	0.0099	−0.0007
CONSTANT	(0.60)	(3.04)	(3.74)	(1.79)	(0.21)	(−0.03)
Year fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Industry fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Wald chi square	949.9656	1683.9419	904.9965	0.0434	0.0441	0.0407
Pseudo R²/R²	0.0773	0.1392	0.0730
N	8,939	8,939	8,939	6,480	5,464	6,802

Panel B: propensity score matching regression results
	Panel A: first stage			Panel B: second stage
	(1)	(2)	(3)	(4)	(5)	(6)
	DPCO_OPT	DNCO_OPT	DRCO_OPT	CAR	CAR	CAR
PCO_OPT	–	–	–	−0.0068***	–	–
PCO_OPT				(−2.86)
NCO_OPT	–	–	–	–	−0.0007***	–
NCO_OPT					(−2.83)
RCO_OPT	–	–	–	–	–	−0.0057**
RCO_OPT						(−2.45)
SIZE	0.0149***	0.0084	0.0182***	−0.0016**	−0.0011	−0.0010
SIZE	(3.34)	(1.55)	(4.14)	(−2.36)	(−1.53)	(−1.49)
LEV	0.0154	0.0358	0.0152	0.0140***	0.0150***	0.0101**
LEV	(0.56)	(1.17)	(0.56)	(2.72)	(2.70)	(2.04)
CASH	0.0337	0.0505	0.0469	−0.0147**	−0.0082	−0.0167***
CASH	(0.89)	(1.21)	(1.21)	(−2.40)	(−1.23)	(−2.81)
TOBINQ	−0.0034	−0.0029	−0.0031	0.0023***	0.0024***	0.0025***
TOBINQ	(−0.81)	(−0.59)	(−0.74)	(3.35)	(3.40)	(4.09)
ROA	0.0515**	0.0726***	0.0396*	0.0096*	0.0148**	0.0104*
ROA	(2.46)	(2.73)	(1.89)	(1.77)	(2.43)	(1.94)
CEO_DUALITY	0.0142	0.0065	0.0136	0.0014	0.0018	0.0012
CEO_DUALITY	(1.35)	(0.54)	(1.30)	(0.82)	(0.98)	(0.70)
LNCEO_TENURE	−0.1874***	−0.1919***	−0.2127***	−0.0023	−0.0025	−0.0030*
LNCEO_TENURE	(−16.45)	(−15.17)	(−19.71)	(−1.27)	(−1.36)	(−1.70)
LNBOARD_SIZE	−0.0042	−0.1562***	−0.0038	0.0021	0.0028	−0.0000
LNBOARD_SIZE	(−0.22)	(−6.62)	(−0.21)	(0.55)	(0.62)	(−0.00)
BOARD_INDEP	0.0540*	0.0588*	0.0444	−0.0048	−0.0035	−0.0034
BOARD_INDEP	(1.71)	(1.72)	(1.48)	(−0.82)	(−0.55)	(−0.58)
LNANALYSTS	0.0227***	0.0285***	0.0242***	−0.0029**	−0.0040***	−0.0034***
LNANALYSTS	(3.79)	(4.28)	(4.20)	(−2.52)	(−3.17)	(−3.04)
RELATIVESIZE	–	–	–	0.0042*	0.0021	0.0030
RELATIVESIZE				(1.86)	(0.86)	(1.36)
ALLCASH	–	–	–	0.0018	0.0005	0.0033*
ALLCASH				(0.97)	(0.23)	(1.79)
ALLSTOCK	–	–	–	−0.0113***	−0.0114***	−0.0109***
ALLSTOCK				(−4.50)	(−4.29)	(−4.55)
RELATEDBID	–	–	–	0.0002	−0.0003	0.0005
RELATEDBID				(0.12)	(−0.18)	(0.29)
TENDEROFFER	–	–	–	−0.0027	−0.0034	−0.0052
TENDEROFFER				(−0.81)	(−0.93)	(−1.56)
COMPETINGBID	–	–	–	−0.0065	−0.0064	−0.0090*
COMPETINGBID				(−1.26)	(−1.15)	(−1.79)
CONSTANT	0.0635	0.4850***	0.3755***	0.0696*	0.0099	−0.0007
CONSTANT	(0.60)	(3.04)	(3.74)	(1.79)	(0.21)	(−0.03)
Year fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Industry fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Wald chi square	949.9656	1683.9419	904.9965	0.0434	0.0441	0.0407
Pseudo R²/R²	0.0773	0.1392	0.0730
N	8,939	8,939	8,939	6,480	5,464	6,802

Note(s): This table presents the PSM results of co-opted board and acquisition performance with other control variables. Panel A reports the mean differences between the control group and matched group. Panel B reports the regression estimates using these two groups. The superscripts ^***, ^** and ^* correspond to statistical significance at the 1%, 5% and 10% levels, respectively. We present the variable definitions in the Appendix

Source(s): Authors’ own work

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