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Heterogeneity effects from market interventions

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Listed:
  • Nihat Aktas
  • Eric de Bodt
  • Michel Levasseur

Abstract

The aim of this paper is to test whether the European Commission activities generate a heterogeneity effect on the merging parties. A sample of 74 firms involved in 45 contested merger and acquisition operations during the years 1990 to 1999 is used. The methodology is based on the GARCH framework. The main result is that, globally, the DGC interventions seem not to reduce significantly the heterogeneity among investors, except for the operations where it takes strong decisions like prohibition. In these last cases, the signal coming from the DGC encompasses valuable information and is well understood by market participants.

Suggested Citation

  • Nihat Aktas & Eric de Bodt & Michel Levasseur, 2004. "Heterogeneity effects from market interventions," The European Journal of Finance, Taylor & Francis Journals, vol. 10(5), pages 412-436.
    • Handle: RePEc:taf:eurjfi:v:10:y:2004:i:5:p:412-436
    DOI: 10.1080/1351847032000166922
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