The Impact on The Suppliers’ Wealth Effect of Horizontal Merge

• Main Authors: Tsung-Che Li, 李宗哲
• Other Authors: Shu-Lin Yang
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/95jy6y

碩士 === 國立臺中科技大學 === 流通管理系碩士班 === 100 === This paper investigates the impact on suppliers’ operating performance and stock price reaction when downstream undertake horizontal mergers and acquisitions from 2000 to 2011. I do find that there are many effects upon the post-merger changes in operating performance and announcement-related stock price revaluations of suppliers. Specifically, the operating performance of the main suppliers is infected with bidders only as the operating performance of bidders not gets better one year of post-merger. This result is indirect consistent with productive efficiency hypothesis. Besides, the cumulative abnormal returns of bidders during announcement period are significantly positively associated with the cumulative abnormal returns of suppliers, which is also consistent with improved productive efficiency. Further, for the suppliers of the bidders with positive wealth effect experience a negative wealth effect, which support the buying power viewpoint as sources of gains to horizontal mergers. Moreover, those continuous suppliers after consolidation downstream experience significant gains in response to merging firm market share post-merge and experience negligible changes in operating performance. Following the reasoning above, I explain these results as somewhat more consistent with the theory of productive efficiency.