Wealth Effects of Acquisitions in New Active Market for Corporate Control

50 Pages Posted: 15 Feb 2014

See all articles by Kotaro Inoue

Kotaro Inoue

School fo Engineering, Tokyo Institute of Technology

Saori Nara

Meiji University School of Commerce

Takashi Yamasaki

Kobe University - Graduate School of Business Administration

Date Written: February 14, 2014

Abstract

This study examines wealth effects of mergers and acquisitions in developing mergers and acquisitions market by using data of both domestic and cross-border acquisitions by Japanese firms. Although Japan had the second largest GDP in the world during the analyzed period, active market for corporate control in Japan started recently. The results indicate that M&A by Japanese firms enhance shareholder wealth. We also show that larger synergy realized in horizontal acquisitions with full control of target firms. Existence of outside directors and monitoring by shareholders contribute the post-acquisition performance. We provide evidence that acquisitions by Japanese firms play similar role as those in the US and the UK.

Keywords: Mergers and acquisitions, Japan, Corporate governance, Long-term performance

JEL Classification: G14, G32, G34, L25

Suggested Citation

Inoue, Kotaro and Nara, Saori and Yamasaki, Takashi, Wealth Effects of Acquisitions in New Active Market for Corporate Control (February 14, 2014). Available at SSRN: https://ssrn.com/abstract=2396257 or http://dx.doi.org/10.2139/ssrn.2396257

Kotaro Inoue (Contact Author)

School fo Engineering, Tokyo Institute of Technology ( email )

2-12-1 Ookayama, Muguro-ku
Tokyo, 152-8552
Japan

Saori Nara

Meiji University School of Commerce ( email )

1-1 Kanda-Surugadai Chiyoda-ku
Tokyo, 101-8301
Japan
+81-3-3296-2287 (Phone)
+81-3-3296-2287 (Fax)

Takashi Yamasaki

Kobe University - Graduate School of Business Administration ( email )

2-1 Rokkodai-cho
Nada-ku
Kobe, Hyogo 657-8501
Japan

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