2015/08/01 by Peter L. Rousseau, Caleb Stroup · 2 citations
Business, Management and Accounting · #Corporate Finance and Governance #Auditing, Earnings Management, Governance #Private Equity and Venture Capital
paper · pdf · doi:10.1017/s0022109015000289
openalex publication_date 2015/08/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/05/21
Abstract We trace directors through time and across firms to study whether acquirers’ access to nonpublic information about potential targets via their directors’ past board service histories affects the market for corporate control. In a sample of publicly traded U.S. firms, we find acquirers about 4.5 times more likely to buy firms where their directors once served. Effects are stronger when the acquirer has better corporate governance, the interlocked director has a larger ownership stake at the acquirer, or the director played an important role during past service. The findings are robust to endogeneity of board composition and controls for contemporaneous interfirm interlocks.