He’s got big balls: the role of testosterone in M&A activity

What do AC/DC and Canadian researchers have in common? Their investigation of testosterone. While the Aussies drew connection between large balls and throwing parties, three academics at University of British Columbia analyzed the role of testosterone in corporate mergers and acquisition behavior. 

Their study concluded that indeed, young male CEOs are more aggressive and impulsive dealmakers, often leading to destruction of shareholder value in the process. They claim male CEOs > 45 are:
  • 4% more likely to be acquisitive than older CEOs
  • 20% more likely to recall a previous offer
  • 2% more likely to force a tender offer as opposed to a negotiated agreement
They try to control for attributes such as CEO tenure, etc playing a role but also admit that without actual testosterone testing, there could be other factors at play.

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