Institutional changes of Specified Purpose Acquisition Companies (SPACs)

•We study structural changes and determinants of merger outcomes of SPACs.•SPACs significantly redesigned corporate structure as a response to market pressure.•SPACs’ institutional characteristics are important determinants of merger outcomes.•SPACs that have a focus on China have higher likelihood of merger.•Merger is more likely if the lead underwriter is investment bank Early Bird Capital.

This study documents the changes in the corporate design of modern Specified Purpose Acquisition Companies (SPACs) for the years 2003–2012. Do institutional characteristics of SPACs determine the success of their merger outcomes? The paper finds that SPACs significantly redesigned their structure in the period under observation. In addition, the probability of a merger for SPACs increases if they are able to announce the deal soon after the Initial Public Offering (IPO), if the deal focuses on China and when their IPO is underwritten by Early Bird Capital.