The Long Term Performance of Acquiring Firms: A Re-Examination of an Anomaly
40 Pages Posted: 30 May 2007
Date Written: May 17, 2007
In this paper, we investigate the long-term stock return performance of Canadian acquiring firms in the post event period by using 1300 M&A events between 1993-2002 period. We use both event-time and calendar-time approach and conduct robustness tests for benchmarks, methodological choices, statistical techniques and other related factors such as payment methods. We also assess the role of governance variables. Contrary to stylized facts reported in the U.S. studies, we do not find negative abnormal long-term abnormal returns for the acquirer following an acquisition event.
Keywords: Mergers and acquisitions, Market Efficiency, Long-term performance
JEL Classification: G14, G34
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