Acquirer board independence and acquisitions performance: A meta-analysis

Abstract

Using meta-analytical techniques, this study examines whether and how acquirer board independence affects acquisition performance. It also investigates the moderating effects of country-level formal institutions on this relationship to shed light on the fragmented empirical results reported by prior studies. Using a sample of 85 primary studies representing 646 effect sizes and a total of 1,131,639 observations, the overall results indicate a positive and significant relationship between acquirer board independence and acquisition performance. Moreover, the results of the three-level meta-regression analysis reveal that the country-level formal institutional factor of shareholder rights negatively moderates the focal relationship, while creditor rights have, at best, a minimal impact. This study blends insights from two theoretical perspectives—agency theory and transaction cost economics—and clarifies the strength and direction of the association between acquirer board independence and acquisition performance. Moreover, by incorporating institutional theory to examine the moderating effects of formal institutions, this study sheds light on how broader institutional contexts impact the effectiveness of corporate governance practices and their value implications in acquisition transactions. Accordingly, this study provides novel findings with empirically validated theoretical underpinnings.