The Measurement of Operating Performance Following Corporate Acquisitions: A Comparison of Event-Time to Calendar-Time Measures

Posted: 6 Jun 2003

See all articles by Allan Eberhart

Allan Eberhart

Georgetown University

Akhtar R. Siddique

Government of the United States of America - Risk Analysis Division

Abstract

We examine a sample of 1,175 firms following their acquisition of another firm. Consistent with previous work, we measure the operating performance of these firms in event-time, and find that they experience significantly positive abnormal operating performance subsequent to their acquisition. When we measure their abnormal operating performance in calendar-time, however, we find that our sample firms' abnormal operating performance is insignificant. In short, we find that the standard event-time measures of abnormal operating performance overstate the benefits of corporate acquisitions.

Keywords: Mergers and Acquisitions, Operating Performance, Corporate Finance

JEL Classification: G14, G30, G34

Suggested Citation

Eberhart, Allan and Siddique, Akhtar R., The Measurement of Operating Performance Following Corporate Acquisitions: A Comparison of Event-Time to Calendar-Time Measures. Available at SSRN: https://ssrn.com/abstract=412580

Allan Eberhart (Contact Author)

Georgetown University ( email )

McDonough School of Business
Washington, DC 20057
United States
202-687-4584 (Phone)

Akhtar R. Siddique

Government of the United States of America - Risk Analysis Division ( email )

400 7th Ave
Washington, DC 20219
United States
202-649-5526 (Phone)

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