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Domestic mergers and acquisitions in BRICS countries: Acquirers and targets

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  • Kinateder, Harald
  • Fabich, Matthias
  • Wagner, Niklas

Abstract

We study the firm value determinants for domestic acquisitions within BRICS countries considering both acquirer and target shareholders. Targets earn significant positive announcement returns of 1.45% on average. Acquirers lose slightly. We employ a comprehensive set of explanatory variables and test for cross-sectional return drivers. Target returns are negatively related to pre-announcement returns and firm size, while they are positively related to GDP growth. Our results are consistent with insider trading capturing some of the target excess returns, which are highest for small targets based in countries with high recent GPD growth.

Suggested Citation

  • Kinateder, Harald & Fabich, Matthias & Wagner, Niklas, 2017. "Domestic mergers and acquisitions in BRICS countries: Acquirers and targets," Emerging Markets Review, Elsevier, vol. 32(C), pages 190-199.
  • Handle: RePEc:eee:ememar:v:32:y:2017:i:c:p:190-199
    DOI: 10.1016/j.ememar.2017.06.005
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    Keywords

    Announcement returns; BRICS countries; Emerging markets; Event study; Mergers and acquisitions;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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