Market Valuation and Acquisition Quality: Empirical Evidence

• 成果类型: Article
• 署名作者: Bouwman, Christa H. S.; Fuller, Kathleen; Nain, Amrita S.
• 署名单位: McGill University; University of Mississippi; University System of Ohio; Case Western Reserve University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhm073
• 发表日期: 2009
• 页码: 633
• 关键词: ABNORMAL STOCK RETURNS; acquiring firms; operating performance; CORPORATE ACQUISITIONS; PRICE PERFORMANCE; TEST STATISTICS; MERGER ACTIVITY; takeovers; gains; tests

摘要

Existing research shows that significantly more acquisitions occur when stock markets are booming than when markets are depressed. Rhodes-Kropf and Viswanathan (2004) hypothesize that firm-specific and market-wide valuations lead to an excess of mergers, and these will be value destroying. This article investigates whether acquisitions occurring during booming markets are fundamentally different from those occurring during depressed markets. We find that acquirers buying during high-valuation markets have significantly higher announcement returns but lower long-run abnormal stock and operating performance than those buying during low-valuation markets. We investigate possible explanations for the long-run underperformance and conclude it is consistent with managerial herding.