Information Discovery in Consecutive Cross-Border Mergers

41 Pages Posted: 28 May 2015 Last revised: 9 Jun 2016

See all articles by Jeremiah Harris

Jeremiah Harris

Kent State University - Department of Finance

Date Written: June 6, 2016

Abstract

I find evidence that announcement day returns to second mergers are greater that the first mergers for consecutive cross-border mergers, contrasting consecutive domestic (U.S.) mergers where returns significantly decline from the first to the second merger. This paper suggests that the increasing returns can be explained by information discovered by investors about the quality of the first merger upon announcement of the second merger. Using heterogeneity in various measures of uncertainty regarding the first merger, I find the increasing returns are concentrated in consecutive mergers where the level of uncertainty about the first merger is the greatest.

Keywords: Mergers and Acquisitions, Serial Acquisitions, Abnormal Returns, Asymmetric Information, Cross-Border Mergers and Acquisitions

JEL Classification: G34, G14, D8

Suggested Citation

Harris, Jeremiah, Information Discovery in Consecutive Cross-Border Mergers (June 6, 2016). Available at SSRN: https://ssrn.com/abstract=2611625 or http://dx.doi.org/10.2139/ssrn.2611625

Jeremiah Harris (Contact Author)

Kent State University - Department of Finance ( email )

College of Business Administration
P.O. Box 5190
Kent, OH 44242-0001
United States

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