TY - JOUR
T1 - The CEO identity of sovereign wealth funds and target firms’ performance
AU - Del Giudice, Alfonso
AU - Petrella, Giovanni
PY - 2021
Y1 - 2021
N2 - The impact of sovereign wealth funds (SWFs) on target firms’
performance is unclear. Previous empirical studies find conflicting evidence,
with some documenting a positive impact and others finding a negative impact
on target firms’ performance. In contrast to previous researchers, we include in
the sample both listed and unlisted targets and reconsider the classification of
political influence on SWF managerial decisions, observing the identity of the
CEO rather than using the Truman score. We identify a ‘political CEO’ as such
if s/he is a political officer or a former political officer or if s/he belongs to the
same family as a political officer. Using a sample of 226 deals, we find
evidence of an impact of SWF investments on target firms’ performance. The
presence of a political CEO has a positive impact on target firms’ profitability,
showing that closer ties to political power play an important role.
AB - The impact of sovereign wealth funds (SWFs) on target firms’
performance is unclear. Previous empirical studies find conflicting evidence,
with some documenting a positive impact and others finding a negative impact
on target firms’ performance. In contrast to previous researchers, we include in
the sample both listed and unlisted targets and reconsider the classification of
political influence on SWF managerial decisions, observing the identity of the
CEO rather than using the Truman score. We identify a ‘political CEO’ as such
if s/he is a political officer or a former political officer or if s/he belongs to the
same family as a political officer. Using a sample of 226 deals, we find
evidence of an impact of SWF investments on target firms’ performance. The
presence of a political CEO has a positive impact on target firms’ profitability,
showing that closer ties to political power play an important role.
KW - SWF
KW - political connection
KW - sovereign wealth fund
KW - target firm performance.
KW - SWF
KW - political connection
KW - sovereign wealth fund
KW - target firm performance.
UR - http://hdl.handle.net/10807/149177
UR - https://www.inderscience.com/info/ingeneral/forthcoming.php?jcode=ijbaaf
U2 - 10.1504/IJBAAF.2021.114477
DO - 10.1504/IJBAAF.2021.114477
M3 - Article
VL - 2021
SP - 158
EP - 176
JO - International Journal of Banking, Accounting and Finance
JF - International Journal of Banking, Accounting and Finance
SN - 1755-3830
ER -