Corporate serial acquisitions:An empirical test of the learning hypothesis

Recent empirical papers report a declining trend in the cumulative abnormal return (CAR)of acquirers during an M&A program. Does this necessarily imply that acquiring CEOs areinfected by hubris and are not learning from previous mistakes? We first confirm theexistence of this declining trend on average. However, we find a positive CAR trend forCEOs likely to be infected by hubris, which is significantly different from the negativetrend found for CEOs who are more likely to be rational. We also explore the time betweensuccessive deals and find empirical evidence to suggest that many CEOs learn substantiallyduring acquisition programs....