The Product Market Impact of Minority Stake Acquisitions

• 成果类型: Article
• 署名作者: Nain, Amrita; Wang, Yan
• 署名单位: University of Iowa; Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2016.2575
• 发表日期: 2018
• 页码: 825-844
• 关键词: finance; Corporate finance; ECONOMICS; input output analysis; Industrial Organization; firm objectives; organization and behavior

摘要

We show that partial equity ownership of a rival firm reduces product market competition. Acquisitions of a minority equity stake in rival firms are followed by higher output prices and higher industry profits, particularly when barriers to entry are high. Stock-price reactions of nonparticipating competitors of the acquirer and target are positive while announcement returns of customer firms are negative. Moreover, announcement returns of rivals are significantly higher and those of customers weakly lower when the customer industry is more competitive and when the acquirer and target are larger firms.