Acquisition announcements and stock market valuations of acquiring firms' rivals: A test of the growth probability hypothesis in China

• 成果类型: Article
• 署名作者: Gaur, Ajai S.; Malhotra, Shavin; Zhu, Pengcheng
• 署名单位: Rutgers University System; Rutgers University New Brunswick; Rutgers University Newark; Toronto Metropolitan University; University of the Pacific
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2009
• 发表日期: 2013
• 页码: 215-232
• 关键词: growth probability hypothesis; acquisitions; rival firms; Stock market returns; CHINA

摘要

To examine the impact of acquisition announcements on the stock market returns of rivals of the acquiring firms, we propose a growth probability hypothesis: when an acquisition is announced, it signals the potential for future growth in the acquirer's industry to the market, resulting in positive stock market reactions to rivals of the acquiring firms. We test the growth probability hypothesis with a longitudinal sample of Chinese domestic and cross-border acquisitions during 19932008. The results provide robust support for this hypothesis as a means to explain market reactions to rivals of acquiring firms. We also empirically test and negate alternative theoretical explanations advanced in prior literature to explain positive market reactions to rivals of the target firms. Copyright (c) 2012 John Wiley & Sons, Ltd.