Corporate governance 'bundles' and firm acquisitiveness

Evridiki Panayi, Konstantinos Bozos*, Gianluca Veronesi

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

8 Citations (Scopus)
41 Downloads (Pure)


Research Question/IssueWe explore how the interrelations of governance mechanisms (“bundles”) influence a firm’s propensity for corporate acquisitions. Focusing on four key internal and external mechanisms, namely board of directors monitoring, CEO pay incentives, takeover market discipline and institutional investor monitoring, we use a sample of 1,171 completed M&A deals by 799 US firms during the period 1998‐2015 to test the Substitution vs Complementarity Hypotheses.
Research Findings/InsightsThe findings provide, in the main, support for both the Substitution and the Complementarity Hypotheses, with several incentives alignment, internal and external monitoring mechanisms acting as substitutes and complements of each other towards firm acquisitiveness.
Theoretical/Academic ImplicationsOur results challenge the notion that corporate governance mechanisms purely function as independent factors and contribute to the configurational perspective of corporate governance. They offer new evidence that combinations or “bundles” of firm‐level governance mechanisms can allow for differing degrees of firm acquisitiveness.
Practitioner/Policy ImplicationsDifferent governance “bundles” will have different implications for major strategic decisions such as corporate acquisitions. Firms seeking to control or increase acquisition propensity can thus consider “equifinal” governance configurations, whereby alternative combinations of governance mechanisms can lead to comparable, desired outcomes.
Original languageEnglish
Pages (from-to)402-426
Number of pages25
JournalCorporate Governance: An International Review
Issue number4
Early online date19 Mar 2021
Publication statusPublished - Jul 2021

Bibliographical note

Funding Information:
We would like to thank the editor, and the two anonymous reviewers for their insightful and constructive comments and suggestions during the review process.

Publisher Copyright:
© 2021 The Authors. Corporate Governance: An International Review published by John Wiley & Sons Ltd.


  • corporate governance
  • acquisitions
  • Substitution
  • Complementarity
  • governance bundles
  • configurational perspective


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