This paper examines changes in acquirer and target companies' Credit Default Swap (CDS) spreads as a proxy for default risk around official mergers and acquisitions (M&A) announce-ments. Related literature extensively documents wealth effects triggered by M&A from the shareholders' perspective,...

We examine whether labor restructuring is an important consideration in making acquisition decisions using U.S. interstate variations in the Worker Adjustment and Retraining Notification Act. We show that the staggered introduction of this labor layoff law has a negative impact both on the...

Using combinations of accounting and stock market performance measures, we advance a comprehensive multidimensional framework for modelling management performance. This framework proposes “poor” management, “myopia”, “hyperopia” and “efficient” management, as four distinct...

Geopolitical risk (GPR) is negatively associated with both domestic and inbound cross-border acquisition activity. In support of the predictions of a real options channel, the negative effect of GPR is more pronounced when acquirers have foreign business segments or are financially constrained,...

This paper distinguishes between value creation through redistribution of physical assets and that from intangible assets. We decompose the market-to-book ratio into fundamental value and unexplained components and find that mergers create wealth when high-value firms primarily acquire physical...

This paper studies the impact of M&A of Canadian firms by emerging market firms on the stock performance of the acquired firms from 2000 to 2016, using the short-term window event study. We find that the abnormal return of target firms on the event day is 10.3 percent and the cumulative abnormal...

We investigate trading activity and liquidity effects of methods of payment on the stock prices of acquiring firms around private firm acquisition announcements. We find significant rises in trading activity around acquisition announcement dates irrespective of the payment method used; however,...

We show that run-ups in U.S. target firm stock returns preceding merger announcements have declined drastically over recent decades. The negative trend in target run-ups cannot be fully explained by changes in deal or target characteristics associated with merger anticipation. However, it...

Managers frequently project high synergistic gains when announcing M&As. This paper analyzes when promised synergies are value-relevant. Using text analytical methods, we only find a positive relationship between synergy projections and announcement returns when promised numerical projections...

This study examines implications for mergers and acquisitions (M&As) by focusing on deals that are subsequently divested. A comprehensive data set on the corporate divorce phenomenon during the past quarter of a century is constructed with financial news as well as SEC filings. Using this...