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Analogical Reasoning from Source to Target Acquisitions

Minutolo, Marcel Charles (2009) Analogical Reasoning from Source to Target Acquisitions. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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This study draws upon organizational learning in the management domain and analogical reasoning in the psychology arena to examine the antecedents of acquisition success in a study of 655 firms from 54 industries that conducted 2622 acquisitions from 1991 through 2005. Where previous work in this domain focused on cumulative abnormal returns (CAR) as the measure of performance and ordinary least squares as the method of analysis, this work extends the literature by introducing Tobin's Q-ratio as the measure of performance and autoregressive, integrated, moving average (ARIMA) model with transfer functions as the methodological approach. Earlier research on the influence of prior experience on focal acquisition performance has yielded interesting insights despite variation in findings. However, CAR is a short-term measure that is dependent upon stockholder reaction and does not fully anticipate the long-term fitness of the acquisition event. Ex ante, this study expected to result in a meta-narrative applicable to all merger and acquisition activity that could guide management of an acquisition program through the identification of the antecedent conditions of success. Prior research suggests that the Q measure is more relevant to managerial understanding and strategic orientation than insights gained from investor opinion as measured from cumulative abnormal returns. This study's findings suggest that acquisition experience, timing, antecedent performance, and, interaction between experience, timing and performance are all related to focal acquisition results. Further, when ARIMA is used to analyze the data and Q is the dependent variable, additional details and richer insights about the influence of the independent measures are gained. These findings justify the additional effort and time necessary for managers to use Tobin's Q. Additionally, while CAR does provide a particular set of actionable information, Tobin's Q-ratio provides a more robust long-term indicator of acquisition performance especially where analogical reasoning is the process through which learning is demonstrated.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
Minutolo, Marcel
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairCamillus, Johncamillus@katz.pitt.eduCAMILLUS
Committee MemberBidanda, Bpayabidanda@pitt.eduBIDANDA
Committee MemberPrescott, Johnprescott@katz.pitt.eduPRESCOTT
Committee MemberVargas, Luisvargas@katz.pitt.eduLGVARGAS
Committee MemberMadhavan, Ravindranathrmadhavan@katz.pitt.eduRAM115
Date: 30 September 2009
Date Type: Completion
Defense Date: 1 May 2009
Approval Date: 30 September 2009
Submission Date: 14 May 2009
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Institution: University of Pittsburgh
Schools and Programs: Joseph M. Katz Graduate School of Business > Business Administration
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: abnormal returns; analogical reasoning; CAR; experiential learning; M&A; merger and acquisition; organizational learning; resource base view; strategy; Tobin's Q; transaction cost
Other ID:, etd-05142009-121124
Date Deposited: 10 Nov 2011 19:44
Last Modified: 15 Nov 2016 13:43


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