Who makes acquisitions? An empirical investigation of restaurant firms

• Tarik Dogru ^[1] ; Ozgur Ozdemir ^[4] ; Murat Kizildag ^[2] ; Aysa Erdogan ^[3]
  1. [1] Florida State University

     Florida State University

     Estados Unidos

     
  2. [2] University of Central Florida

     University of Central Florida

     Estados Unidos

     
  3. [3] Boğaziçi University

     Boğaziçi University

     Turquía

     
  4. [4] University of Nevada, Las Vegas

     University of Nevada, Las Vegas

     Estados Unidos

     

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• Localización: Tourism economics: the business and finance of tourism and recreation, ISSN 1354-8166, Vol. 27, Nº. 1, 2021, págs. 260-268
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • The purpose of this study is to examine the financial and operational factors that explain acquisitiondecisions in restaurant firms. We analyze the effects of franchising, dividends, leverage, Tobin’sQ,total assets, sales growth, and cash flows on restaurant firms’ acquisition decisions. The findingsshow that firms with high growth prospects and excess cash flows (i.e. small firms and franchisingrestaurant firms) are more likely to make acquisitions than their counterparts. Furthermore, firmswith higher dividend payouts are less likely to engage in acquisition deals due to lack of cash.Shareholders perceive acquisitions to be value-decreasing only if large restaurant firms (notnecessarily franchising) make acquisitions, while shareholders perceive acquisitions to be value-increasing when franchising firms make acquisitions. The findings provide partial support for thepostulations of overinvestment and underinvestment theories. Theoretical and practical implica-tions are discussed.