The impacts of reference prices on mergers and acquisitions

• Main Authors: Wan-Chin Wu, 吳婉勤
• Other Authors: Yu-Hsiu Lin
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/21518624363433879002

碩士 === 國立高雄應用科技大學 === 金融資訊研究所 === 99 === This study examines how psychological reference prices affect M&A activities and performance in publicly traded firms in Taiwan. We find that the acquiring firms use the target firms’ historical stock prices as reference points or judgmental anchors in setting the offer prices, even when other control variables related to the target firms’ fundamental values are taken into account. The results show the offer price is positively affected by the historical lowest prices of the target although such prices are economically unremarkable. Though the offer price is driven by the historical lowest prices, this anchoring effect does not show significantly negative impact on the bidder’s short-term performance, but it may have significantly negative influence on the bidder’s long-term performance.