89 NTU Management Review Vol. 31 No. 1 Apr. 2021 Dep: MAt (1) Full Sample (2) All-Cash Deals (3) Within Industry Sample (4) Within Industry & All-Cash Deals Cash/TAt-1 Salest-1 Market_to_Bookt-1 EBITDA/TAt-1 Stock returnt-1 Industry M&A liquidityt-1 Herfindahl indext-1 Market leveraget-1 InsideOwnt-1 0.0792*** (3.62) 0.00366 (1.32) -0.0129*** (-3.76) 0.0524 (1.58) 0.0179*** (2.62) 0.335*** (4.90) -0.0378*** (-2.70) -0.148*** (-6.72) -0.00195*** (-2.69) 0.0418*** (2.59) 0.00487** (2.37) -0.0105*** (-4.02) 0.0344 (1.39) 0.00104 (0.20) 0.210*** (4.24) -0.0403*** (-3.70) -0.121*** (-7.08) -0.000986* (-1.80) 0.0420** (2.48) -0.00517** (-2.33) -0.00586** (-2.24) 0.0328 (1.29) 0.00903* (1.68) 0.158*** (2.89) -0.0771*** (-6.29) -0.0537*** (-3.12) -0.000548 (-1.04) 0.0188* (1.65) -0.00255* (-1.65) -0.00410** (-2.27) 0.0216 (1.23) -0.000358 (-0.09) 0.109*** (3.00) -0.0473*** (-5.17) -0.0438*** (-3.58) -0.000413 (-1.09) Year fixed effect Number of observations Yes 13,553 Yes 12,467 Yes 12,620 Yes 12,060 Panel A in Table 3 investigates whether the excess cash will make managers who are granted greater ESOs more willing to undertake M&A decisions. To better understand the economic results, we report the marginal effects of the probit model at mean values. In column 1, the coefficient of Vega is significantly positive (0.0693, significant at the 5% level), showing consistent results with prior studies. The risk incentive of ESOs (vega) makes managers more likely to undertake M&A activities (Datta et al., 2001; Croci and Petmezas, 2015). One unit of risk incentive (vega) granted to managers in non-cashrich firms increases the likelihood of undertaking an acquisition by 6.93% relative to the sample mean, 13.95%. However, the effect of Delta on the M&A decision is insignificantly positive. Table 3 The Effect of Excess Cash on the ESOs-Induced Corporate M&A Decision (cont.) Panel A: Probit Model
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