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Effects of merger and acquisition announcements on stock returns: an empirical study of banks listed on NSE & NYSE

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  • Dharen Kumar Pandey
  • Vineeta Kumari

Abstract

We use the event study method to examine the merger and acquisition announcement effects on the stock returns of the sample of 14 acquiring banks from India and the United States (US). The study concludes that although different markets react differently, such news does impact the stock price reaction by generating some abnormal returns around the announcement date. Since the cumulative average abnormal returns (CAARs) on most of the days in the event window period, as well as the post-event-window period, are significant for the shares of the Indian acquiring banks, the Indian market, an emerging market is more sensitive to such information as compared to the US market, a developed one.

Suggested Citation

  • Dharen Kumar Pandey & Vineeta Kumari, 2020. "Effects of merger and acquisition announcements on stock returns: an empirical study of banks listed on NSE & NYSE," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 12(1), pages 49-62, June.
  • Handle: RePEc:rfb:journl:v:12:y:2020:i:1:p:49-62
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    4. Brown, Stephen J. & Warner, Jerold B., 1980. "Measuring security price performance," Journal of Financial Economics, Elsevier, vol. 8(3), pages 205-258, September.
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