Ownership Structure and Stock Return to Acquiring Firms

• Main Authors: Chien, Hsiu-Wei, 簡秀薇
• Other Authors: Pan, Yuh-Yeh
• Format: Others
• Language: zh-TW
• Published: 1998
• Online Access: http://ndltd.ncl.edu.tw/handle/52257860978071419164

碩士 === 淡江大學 === 國際貿易學系 === 86 === Under the pressure of global competition, it has become a trend for Taiwan business to pursue growth and competitive advantage by merger and acquisitions (M&As). Empirical results of former researches suggest that ownership structure play an important role in monitoring activities of firms, such as merger and acquisitions. However, there is no relevant study focusing on the monitoring effect of institution holdings over Taiwanese acquiring firms. Therefore, this study addresses the issue of whether shareholder-wealth effects are associated with the ownership structure of acquiring firms. Examining 120 M&A announcements of acquiring firms during 1988 to 1997 by event study and multiple regression, the main findings are as follows:1. M&A announcements are associated with significant positive abnormal returns across event window (t= -4 ~0).2. The cumulative abnormal returns of international M&A announcements are less than those of local ones, however, international M&A announcements are insignificantly related to abnormal returns. 3. Related size and cumulated abnormal returns are significantly positive related, which implies that larger relative size is associated with larger returns to shareholders.4. As for the insider holdings, the cumulative abnormal returns associated with companies of higher board holding are larger than those of lower ones, however, board holdings are insignificantly related with abnormal returns.5. Financial institute holdings are associated with significantly positive abnormal returns, which implies that financial institute investors do perform efficient monitoring effect. Other institute holdings and total institutional holdings are associated with significantly negative abnormal returns, which are in accordance with Pound''s strategic alliance hypothesis.