Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers

This study presents the results from a comprehensive out-of-sample test of long-run returns following mergers and acquisitions (M&As). Using a unique sample from 23 frontier markets of almost 800 transactions conducted during the years 1992 to 2016, we implement both cross-sectional tests and ti...

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Main Authors:	Adam Zaremba, Adam Szyszka, Michał Płotnicki, Przemysław Grobelny
Format:	Article
Language:	English
Published:	Vilnius Gediminas Technical University 2018-05-01
Series:	Journal of Business Economics and Management
Subjects:	mergers acquisitions long-run returns long-term underperformance frontier equity markets behavioral finance
Online Access:	https://journals.vgtu.lt/index.php/JBEM/article/view/1584

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spelling	doaj-b1c25c39ff114874b5ec2a063114f8362021-07-02T11:23:01ZengVilnius Gediminas Technical UniversityJournal of Business Economics and Management1611-16992029-44332018-05-0119110.3846/16111699.2017.1399162Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirersAdam Zaremba0Adam Szyszka1Michał Płotnicki2Przemysław Grobelny3Dubai Business School, University of Dubai, Academic city, Dubai, UAE, P.O. Box: 14143; Department of Investment and Capital Markets, Poznan University of Economics and Business, Niepodleglosci 10, 61-875 Poznan, Poland3 Department of Capital Markets, Collegium of World Economy, SGH Warsaw School of Economics, al. Niepodleglosci 162, 02-554 Warsaw, PolandDepartment of Capital Markets, Collegium of World Economy, SGH Warsaw School of Economics, al. Niepodleglosci 162, 02-554 Warsaw, PolandDepartment of Investment and Capital Markets, Poznan University of Economics and Business, Niepodleglosci 10, 61-875 Poznan, PolandThis study presents the results from a comprehensive out-of-sample test of long-run returns following mergers and acquisitions (M&As). Using a unique sample from 23 frontier markets of almost 800 transactions conducted during the years 1992 to 2016, we implement both cross-sectional tests and time-series examinations based on a calendar-time portfolio approach. Contrary to evidence from developed markets, the M&As in these frontier markets do not lead to abnormal underperformance of acquirers, regardless of whether they paid for the acquisition with cash or stock. The results are robust to many considerations, including subsample and subperiod analysis, alternative formation periods, different portfolio construction approaches. https://journals.vgtu.lt/index.php/JBEM/article/view/1584mergersacquisitionslong-run returnslong-term underperformancefrontier equity marketsbehavioral finance
collection	DOAJ
language	English
format	Article
sources	DOAJ
author	Adam Zaremba Adam Szyszka Michał Płotnicki Przemysław Grobelny
spellingShingle	Adam Zaremba Adam Szyszka Michał Płotnicki Przemysław Grobelny Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers Journal of Business Economics and Management mergers acquisitions long-run returns long-term underperformance frontier equity markets behavioral finance
author_facet	Adam Zaremba Adam Szyszka Michał Płotnicki Przemysław Grobelny
author_sort	Adam Zaremba
title	Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers
title_short	Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers
title_full	Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers
title_fullStr	Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers
title_full_unstemmed	Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers
title_sort	post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers
publisher	Vilnius Gediminas Technical University
series	Journal of Business Economics and Management
issn	1611-1699 2029-4433
publishDate	2018-05-01
description	This study presents the results from a comprehensive out-of-sample test of long-run returns following mergers and acquisitions (M&As). Using a unique sample from 23 frontier markets of almost 800 transactions conducted during the years 1992 to 2016, we implement both cross-sectional tests and time-series examinations based on a calendar-time portfolio approach. Contrary to evidence from developed markets, the M&As in these frontier markets do not lead to abnormal underperformance of acquirers, regardless of whether they paid for the acquisition with cash or stock. The results are robust to many considerations, including subsample and subperiod analysis, alternative formation periods, different portfolio construction approaches.
topic	mergers acquisitions long-run returns long-term underperformance frontier equity markets behavioral finance
url	https://journals.vgtu.lt/index.php/JBEM/article/view/1584
work_keys_str_mv	AT adamzaremba postmergerreturnsinfrontiermarketsorhowwelearnedtostopworryingandlovetheacquirers AT adamszyszka postmergerreturnsinfrontiermarketsorhowwelearnedtostopworryingandlovetheacquirers AT michałpłotnicki postmergerreturnsinfrontiermarketsorhowwelearnedtostopworryingandlovetheacquirers AT przemysławgrobelny postmergerreturnsinfrontiermarketsorhowwelearnedtostopworryingandlovetheacquirers
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Post-merger returns in frontier markets, or how we learned to stop worrying and love the acquirers

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