At What Point Will Business Executives Abandon Their Company?

초록

This study tries to investigate the point at which a manager of a failed company abandons the company for the M&A type where the insolvent company abandons itself and is absorbed by a larger company. Considering variables such as probability of default, asset liability ratio, and return on equity (ROE), we will look into the conditions under which corporate managers abandon the company and investigate whether there are any psychological barriers by categorizing them according to business types. First, we will define and distinguish the groups of insolvent companies from the hundreds of thousands of US M&A data, referencing several factors such as the company's default probability and asset-liability ratio. Second, we will analyze the ROE and stock returns of the first, second and third quarters before the merger of the insolvent company is disclosed, and examine psychological barriers such as the time and conditions under which the insolvent firm's manager abandons the company. This study will contribute to predicting the timing and conditions of M&A for insolvent companies.