The Sauder of School of Business is publishing research this Friday suggesting that young male CEOs with above-average testosterone levels are more likely to play the antagonist in the corporate mergers and acquisitions games.
The research also suggests that testosterone can be a negative factor in the M&A decision-making process.
Professor Maurice Levi is a co-author of the Deal or No Deal: Hormones and the Mergers and Acquisitions Game study.
“We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisition,” said Levi in a release.
“For instance, young CEOs, who have higher levels of testosterone, tend to reject offers even when this is against their interest.”
The study shows that younger CEOs operating with more testosterone in their systems are 20% more likely to withdraw a merger or acquisition bid than their older counterparts.
Young CEOs are also 4% more likely to “flex their managerial muscles” by attempting to acquire other companies.
The researchers analyzed 350 merger and acquisition bids in the United States between 1997 and 2007.
The Sauder paper will be published in the INFORMS journal Management Science on September 10 (http://mansci.journal.informs.org).