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Revenue enhancement and wealth effects of mergers and acquisitions in Asian emerging markets

Author

Listed:
  • Jianyu Ma
  • Jose A. Pagan
  • Yun Chu

Abstract

Revenue enhancement and value creation are core issues of mergers and acquisitions (M&A). Revenue enhancing synergy associated with cross-industry M&A is supported by Asian emerging markets. Both within-industry M&A and cross-industry M&A deals realise significant positive abnormal returns. The difference between the two categories of M&A is statistically significant in a three-day window, but not statistically significant in a two-day window. Information leakages may be driving the larger valuation effects because a three-day window includes one day before the announcement date. Since large firms tend to diversify their business, the result that cross-industry M&A deals realise lower abnormal returns than within-industry may be driven by the firm size effect.

Suggested Citation

  • Jianyu Ma & Jose A. Pagan & Yun Chu, 2010. "Revenue enhancement and wealth effects of mergers and acquisitions in Asian emerging markets," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 4(2), pages 179-194.
    • Handle: RePEc:ids:ijrevm:v:4:y:2010:i:2:p:179-194
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