First Essay:
Using a sample of 15,835 completed M&A transactions in U.S. from 1985 to 2015, we document three main empirical results. First, consistent with the notion that the disciplinary effect of competition on corporate management, acquiring firms in competitive industries experience significantly positive announcement returns, while the abnormal returns of acquiring firms in non-competitive industries are insignificant. Second, market competition is correlated to the shareholder value in different types of M&A transaction. Horizontal and vertical integrations have positive announcement returns, while conglomerate integrations have negative announcement returns, irrespective of the condition of market competition. Third, the return of small acquiring firms is higher than the return of large acquiring firms, and this size effect is more profound in non-competitive industries.
Second Essay:
This paper examines the long-term performance of the reverse merger (RM) transactions in Taiwan stock market. Shell companies tend to conduct private placements to raise equity capital in the year following RM transactions. Based on the intended use of capital, issuers of private placements are classified into three categories: investment, recapitalization, and general corporate purposes. We find that shell companies in the investment category experience better long-term performance in the subsequent three years, which is consistent with the view that RM firms with strategic plans to increase in investments in capital expenditures are signaling profitable investment opportunity. However, shell companies in the recapitalization or general corporate purposes categories experience no or poor subsequent underperformance, suggesting that RM deals in these two categories are speculative in nature and short-sightedness that destroy the long-term shareholder wealth.
| Identifer | oai:union.ndltd.org:CHENGCHI/G1013575031 |
| Creators | 劉晉吉, Liu, Chin Chi |
| Publisher | 國立政治大學 |
| Source Sets | National Chengchi University Libraries |
| Language | 英文 |
| Detected Language | English |
| Type | text |
| Rights | Copyright © nccu library on behalf of the copyright holders |
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