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The performances of acquired firms in the steel industry: Do financial institutions cause bubbles?

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  • Huh, Kwang-Sook

Abstract

This study investigates the impact of acquisitions on the steelmaker's performances including PER and technical efficiency in the world steel industry over the period 1992–2011. The study classifies the acquiring firms into two types, steelmakers and financial institutions, to capture the differences of the effect of acquisitions depending on the type of acquirers. In this context, the study examines whether acquisitions by financial institutions result in bubbles in the steel industry. Empirical results demonstrate that steelmakers acquired by financial institutions have achieved relatively poor or insignificant operating performances, although there is a statistically significant increase of PER.

Suggested Citation

  • Huh, Kwang-Sook, 2015. "The performances of acquired firms in the steel industry: Do financial institutions cause bubbles?," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 143-153.
  • Handle: RePEc:eee:quaeco:v:58:y:2015:i:c:p:143-153
    DOI: 10.1016/j.qref.2015.03.001
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    Cited by:

    1. Fomin, M., 2016. "Business cycles and acquisition policy: Analysis of M&A deals of metallurgical companies," Working Papers 6441, Graduate School of Management, St. Petersburg State University.

    More about this item

    Keywords

    Acquisitions; Financial institutions; Operating performance; Steel industry;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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