Cross-Business Information Technology Integration and Acquirer Value Creation in Corporate Mergers and Acquisitions
| Autor: | Vahap Bülent Uysal, Hüseyin Tanriverdi |
|---|---|
| Rok vydání: | 2011 |
| Předmět: |
Business information
Information Systems and Management Short run Computer Networks and Communications business.industry Information technology Library and Information Sciences Business operations Management Information Systems Consolidation (business) Information technology management Mergers and acquisitions business Capital market Industrial organization Information Systems |
| Zdroj: | Information Systems Research. 22:703-720 |
| ISSN: | 1526-5536 1047-7047 |
| DOI: | 10.1287/isre.1090.0250 |
| Popis: | This study develops and tests the idea that the cross-business information technology integration (CBITI) capability of an acquirer creates significant value for shareholders of the acquirer in mergers and acquisitions (M&A). In M&A, integrating the IT systems and IT management processes of acquirer and target could generate benefits such as (a) the consolidation of IT resources and the reduction of overall IT costs of the combined firm, (b) the development of an IT-based coordination mechanism and the realization of cross-firm business synergies, (c) the minimization of potential disruptions to business operations, and (d) greater ability to comply with relevant laws and regulations and the reduction of regulatory compliance costs. We test these ideas in a sample of 141 acquisitions conducted by 86 Fortune 1000 firms. In the short run, acquirers that have high levels of CBITI capabilities receive positive and significant cumulative abnormal returns to their M&A announcements. Announcement period returns indicate that the capital markets value CBITI similarly in same-industry and different-industry acquisitions. In the long run, acquirers with high levels of CBITI capabilities obtain significantly higher abnormal operating performance. They create significantly greater value in complementary acquisitions from different industries than in related acquisitions from the same industry. The findings have important implications for M&A research and practice. |
| Databáze: | OpenAIRE |
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