Abstract

This study examines whether the interaction of corporate managerial attributes and the amount of private information in stock prices exerts significant effects on the sensitivity of mergers and acquisitions (M&As) and the performance of acquiring firms. We find the heterogeneity in firms’ M&A decisions and outcomes is greatly attributed to the interaction of heterogeneous managerial attributes and private information in stock prices. We also document that managerial attributes have distinct and greater explanatory power on acquirers’ performance than firm fixed effects and deal characteristics. Our findings are also robust to other endogeneity concerns and different measures of stock price informativeness and managerial attributes.