Working Papers by Jean-Gabriel Cousin
# | Title | Authors | Date | Length | Paper | Abstract | |
---|---|---|---|---|---|---|---|
1462 | The (Un)intended Consequences of M&A Regulatory Enforcements | Roll, Richard de Bodt, Eric Cousin, Jean-Gabriel Officer, Micah | 03/21/2022 | 56 | sswp1462.pdf | Economic and policy uncertainty affect merger and acquisition (M&A) activity. In this paper, we use Department of Justice (DOJ) and Federal Trade Commission (FTC) interventions in the M&A market to investigate whether uncertainty around regulatory enforcements also matters. Our results support this conjecture. Using the Hoberg and Phillips (2010) similarity scores to identify product market competitors, we confirm a clear and significant DOJ/FTC regulatory enforcements' deterrence effect on future M&A transaction attempts, a result robust to many alternative specifications and confirmed in additional tests. This deterrence effect is (at least partly) driven by the length of the regulatory process, a factor that exacerbates enforcement uncertainty. Our results identify an (un)intended channel through which M&A regulation hampers efficient resources allocation. | |
1426 | Empirical Evidence of Overbidding in M&A Contests | de Bodt, Eric Cousin, Jean-Gabriel Roll, Richard | 11/15/2016 | 61 | Empirical_Evidence_of_Overbidding_in_MA.pdf | Surprisingly few papers have attempted to develop a direct empirical test for overbidding in M&A contests. We develop such a test grounded on a necessary condition for profit maximizing bidding behavior. The test is not subject to endogeneity concerns. Our results strongly support the existence of overbidding. We provide evidence that overbidding is related to conflicts of interest, but also some indirect evidence that it arises from failing to fully account for the winner's curse. | |
1419 | Improved Methods for Detecting Acquirer Skills | de Bodt, Eric Cousin, Jean-Gabriel Roll, Richard | 05/17/2016 | 42 | SSWP1419.pdf | Large merger and acquisition (M&A) samples feature the pervasive presence of repetitive acquirers. They offer an attractive empirical context for revealing the presence of acquirer skills (persistent superior performance). But panel data M&A are quite heterogeneous; just a few acquirers undertake many M&As. Does this feature affect statistical inference? To investigate the issue, our study relies statistical support for the presence of acquirer skills appears compromised. We introduce a new resampling method to detect acquirer skills with attractive statistical properties (size and power) for presence of acquirer skills but only for a marginal fraction of the acquirer population. This result is robust to endogenous attrition and varying time periods between successive transactions. Claims according to which acquirer skills are a first order factor explaining acquirer cross-sectional cumulated abnormal returns appears overstated. | |
1417 | Full Stock Payment Marginalization in M&A Transactions | de Bodt, Eric Cousin, Jean-Gabriel Roll, Richard | 04/05/2016 | 55 | SSWP_1417.pdf | The number of merger and acquisition (M&A) transactions paid fully in stock in the U.S. market declined sharply after 2001, when pooling and goodwill amortization were abolished by the Financial Accounting Standards Board. Did this accounting rule change really have such far reaching implications? Using a differences-in-differences test and Canada as a counterfactual, this study reveals that it did. We also report several other results confirming the role of pooling abolishment, including (i) that the decrease in full stock payment relates to CEO incentives and (ii) that previously documented determinants of the M&A mode of payment cannot explain the post pooling abolishment pattern. These results are also robust to controls for various factors, such as the Internet bubble, the exclusion of cross-border deals, the presence of Canadian cross-listed firms, the use of a constant sample of acquirers across the pooling and post pooling abolishment periods, the use of Europe as an alternative counterfactual, and controls for the SEC Rule 10b-18 share repurchase safe harbor amendments of 2003. | |
1390 | The Hubris Hypothesis: Emperical Evidence | Roll, Richard de Bodt, Eric Cousin, Jean-Gabriel | 07/10/2014 | 49 pages | SSWP_1390.pdf | The Hubris Hypothesis is grounded on a failure to adequately account for the winner's curse, which leads to overbidding. Surprisingly, few papers have attempted to develop a direct empirical test of the presence of overbidding of M&A contests. We develop two such tests in this paper. Our results strongly support the existence of overbidding.
|