Disentangling the Link Between Stock and Accounting Performance in Acquisitions
AbstractWhile empirical studies that use event-study methodology find on average that the gains from mergers and acquisitions are positive, those focusing on accounting figures tend to find a significant drop in performance. We argue that each of the four possible combinations between positive or negative abnormal stock returns and accounting performance is due to a distinct acquisition motive. We find strong empirical evidence in support of this claim.
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Bibliographic InfoPaper provided by Universitätsbibliothek Wuppertal, University Library in its series Schumpeter Discussion Papers with number sdp11010.
Date of creation: Jul 2011
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Mergers and acquisitions; performance measurement; synergies; preemption; overvaluation; corporate governance; agency problems;
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G3 - Financial Economics - - Corporate Finance and Governance
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-08-09 (Accounting & Auditing)
- NEP-ALL-2011-08-09 (All new papers)
- NEP-CFN-2011-08-09 (Corporate Finance)
- NEP-COM-2011-08-09 (Industrial Competition)
- NEP-EFF-2011-08-09 (Efficiency & Productivity)
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