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• Article | Journal of Accounting Research | March 2020

  The Politics of M&A Antitrust

  Mihir N. Mehta, Suraj Srinivasan and Wanli Zhao

  Antitrust regulators play a critical role in protecting market competition. We examine whether firms can use the political process to opportunistically influence antitrust reviews of corporate merger transactions. We exploit the fact that in some mergers, acquirers and/or targets are connected to powerful U.S. politicians that serve on the two congressional committees with antitrust regulator oversight. We find that merger parties with these connections receive relatively favorable antitrust review outcomes. To establish a causal link, we use plausibly exogenous shocks to firm-politician links and a falsification test. Politician incentives to influence merger antitrust review outcomes appear to be driven by lobbying, contributions, and prior business connections. In sum, our findings suggest that political interference affects the ability of antitrust regulators to provide independent recommendations about the anti-competitive effects of mergers.

  Keywords: political economy; antitrust; FTC; DOJ; Mergers and Acquisitions; Government and Politics; Power and Influence;

  Citation:

  Mehta, Mihir N., Suraj Srinivasan, and Wanli Zhao. "The Politics of M&A Antitrust." Journal of Accounting Research 58, no. 1 (March 2020): 5–53. (Previously circulated under title "Political Influence and Merger Antitrust Reviews.")  View Details

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• Working Paper | HBS Working Paper Series | 2020

  Corporate Leadership and Creditor Recovery Rates: Evidence from Executive Gender

  Clarissa Hauptmann and Anywhere Sikochi

  We examine the relationship between the gender of executives and corporate creditor recovery rates. Using 2,288 defaulted debt instruments, we find that female executives are associated with higher creditor recovery rates. Our findings are robust to tests that correct for potential self-selection inherent in studies of executive gender. We find evidence suggesting that conservatism in financial reporting and risk taking are potential channels through which gender affects creditor recovery rates. In additional tests, we find that the effects of executive gender persist across default types and the 2008 global financial crisis. We also show that gender diversity on the board does not moderate the effect of executive gender.

  Citation:

  Hauptmann, Clarissa, and Anywhere Sikochi. "Corporate Leadership and Creditor Recovery Rates: Evidence from Executive Gender." Harvard Business School Working Paper, No. 20-087, February 2020.  View Details

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• Case | HBS Case Collection | February 2018 (Revised October 2019)

  Steinhoff International and the Stock Exchange

  Siko Sikochi and Austin Lim

  Nicky Newton-King, the Chief Executive Officer of the Johannesburg Stock Exchange (JSE), was put in a difficult position. A scandal had broken out at Steinhoff, a JSE-listed company, under her watch and there were calls to suspend listing of the company securities from the exchange. Newton-King understood that the scandal threatened to erode investor confidence in the credibility of South Africa’s capital markets, at a time when South Africa was already experiencing political and economic uncertainties. Yet, even if Steinhoff had violated listing requirements, she had to determine whether suspending the listing of Steinhoff’s securities from the exchange was in the public interest.

  Keywords: Accounting; Financial Reporting; Mergers and Acquisitions; Financial Markets; Corporate Governance; Retail Industry; Manufacturing Industry; Distribution Industry; Africa; South Africa;

  Citation:

  Sikochi, Siko, and Austin Lim. "Steinhoff International and the Stock Exchange." Harvard Business School Case 118-066, February 2018. (Revised October 2019.)  View Details

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