Does Anticipated Employee Adverse Behavior Affect the Likelihood of Acquisition?

We draw on prior studies on acquisitions and employee adverse behavior to examine how anticipated post-acquisition employee adverse behavior in a firm affects the likelihood of the firm becoming an acquisition target. We argue that the potential for adverse employee behavior from a public firm will be reflected in the potential acquirers' evaluations of the firm's future value and shape their acquisition decision. We exploit plausibly exogenous changes in state unemployment insurance (UI) benefits and empirically test how they affect a firm's likelihood of being an acquisition target from 1999 to 2017. Overall, the results strongly support our theory and are robust against potential alternative mechanisms and endogeneity concerns. [ABSTRACT FROM AUTHOR]