The Real Effects of Financial Markets: The Impact of Prices on Takeovers

• 成果类型: Article
• 署名作者: Edmans, Alex; Goldstein, Itay; Jiang, Wei
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; Columbia University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2012.01738.x
• 发表日期: 2012
• 页码: 933-971
• 关键词: ownership structure; stock returns; leveraged buyouts; performance; EFFICIENCY; targets; mergers; INVESTMENT; EXIT

摘要

Using mutual fund redemptions as an instrument for price changes, we identify a strong effect of market prices on takeover activity (the trigger effect). An interquartile decrease in valuation leads to a seven percentage point increase in acquisition likelihood, relative to a 6% unconditional takeover probability. Instrumentation addresses the fact that prices are endogenous and increase in anticipation of a takeover (the anticipation effect). Our results overturn prior literature that finds a weak relation between prices and takeovers without instrumentation. These findings imply that financial markets have real effects: They impose discipline on managers by triggering takeover threats.