A Meta-Analytic Answer to an Old Dilemma: Do M&As Create Value? Evidence from European Banks
2007 Academy of Management Annual Meeting
28 Pages Posted: 10 Mar 2008
Date Written: November 1, 2007
This paper aims at shedding further light on the controversial impact of M&As on the value creation perceived by investors, as the short-term market performance of the firms involved. 17 event studies are surveyed following meta-analytical procedure, gathering roughly 931 deals: separate analyses are run for bidders, targets and combined entities. Our findings highlight the insensitiveness of bidders to M&As' announcement. Furthermore, the choice of the benchmark in the market model, the geographical scope and the event window position prove to be significant moderators: Italian M&As are less profitable than European ones, and pre-announcement rumours significantly alter the overall performance.
Keywords: M&A, European banks, meta-analysis, event studies
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