Unionization and acquisitions

Article Abstract:

Results of a study demonstrate that unionization of a firm has an influence on its decision to merge with another company. The study relies on merger data gathered from Compustat which are combined with firm-specific union data collected from a variety of sources. The research uses an econometric matching model to isolate the impacts of unionization on the probability that the firms will enter into a merger. Results show that unionization raises the probability that a firm will participate in the acquisition market. Findings also prove that firms with the same union statuses are more likely to merge with one another than those that are not. This does not support the wealth-transfer hypothesis of unions' influence on mergers.

Labor organizations, Labor Unions, Labor Unions and Similar Labor Organizations

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Dividends and taxes: evidence on tax-reduction strategies

Article Abstract:

Companies lower the tax liability of dividends by choosing to receive those dividends through tax-exempt and tax-deferred investments. The marginal tax rate on a dollar of dividends paid by US companies is about 24% as a result of the tax savings provided by the tax-exempt and tax-deferred investments. About half of all taxes paid by companies in 1979 were received by receipts from tax-exempt and tax-deferred dividends. Investors' tax rates play a key role in the selection between dividends and long-term capital gains.

Taxation, Dividends, Tax planning

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Do bidder managers knowingly pay too much for target firms?

Article Abstract:

Top managers' stock transactions were examined to determine whether they intentionally paid too much for target companies. The conflict-of-interest hypothesis states that managers will act in ways that will benefit them personally, even if stock prices and shareholders' wealth is reduced. The sample consisted of 393 companies involved in tender offers or mergers. The results did not confirm that managers knowingly paid too much for target companies.

Investments, Executives, Conflict of interests (Agency), Conflicts of interest

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