Corporate Governance and Acquisitions: Acquirer Wealth Effects in the Netherlands

We examine 865 acquisitions by Dutch industrial firms over the period 1993–2004. Theoretical work based on principal–agent problems predicts that managers of exchange-listed corporations may pursue acquisitions even when these do not add value for the shareholders. Corporate governance structures serve to constrain managers in their acquisition activity. In this chapter we measure the shareholder wealth effects of acquisitions and the factors that determine these wealth effects, including the governance characteristics of corporations. Firms in the Netherlands are interesting from the perspective of corporate governance, because the managerial board has a relatively strong position vis-à-vis shareholders. Several takeover defenses commonly used in the Netherlands not only limit shareholder influence during takeover battles, but also in absence of such fights. On the other hand, ownership is relatively concentrated, which may provide shareholders with the incentives and power to monitor the management. The average abnormal stock return following acquisition announcements is 1.1%, which is a significant positive effect. There is only a significant negative impact of the so-called structured regime, a situation where several shareholder rights are delegated to the supervisory board. This result suggests that governance improves acquisition decisions.The Netherlands;Corporate governance;Event study;Mergers & acquisitions

How much control is enough? Optimizing fun with unreliable input

Brain-computer interfaces (BCI) provide a valuable new input modality within human- computer interaction systems, but like other body-based inputs, the system recognition of input commands is far from perfect. This raises important questions, such as: What level of control should such an interface be able to provide? What is the relationship between actual and perceived control? And in the case of applications for entertainment in which fun is an important part of user experience, should we even aim for perfect control, or is the optimum elsewhere? In this experiment the user plays a simple game in which a hamster has to be guided to the exit of a maze, in which the amount of control the user has over the hamster is varied. The variation of control through confusion matrices makes it possible to simulate the experience of using a BCI, while using the traditional keyboard for input. After each session the user �lled out a short questionnaire on fun and perceived control. Analysis of the data showed that the perceived control of the user could largely be explained by the amount of control in the respective session. As expected, user frustration decreases with increasing control. Moreover, the results indicate that the relation between fun and control is not linear. Although in the beginning fun does increase with improved control, the level of fun drops again just before perfect control is reached. This poses new insights for developers of games wanting to incorporate some form of BCI in their game: for creating a fun game, unreliable input can be used to create a challenge for the user