Is the Event Study Methodology Useful for Merger Analysis? A Comparison of Stock Market and Accounting Data

Tomaso Duso, Klaus Gugler () and Burcin Yurtoglu

CIG Working Papers from Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG)

Abstract: We use a sample of 167 mergers during the period 1990-2002 involving 544 firms either as merging firms or competitors. We contrast a measure of the merger’s profitability based on event studies with one based on accounting data. We find positive and significant correlations between them when using a long window around the announcement date. ZUSAMMENFASSUNG - (Ist die "event study" Methodologie nützlich für die Analyse von Fusionen? Ein Vergleich von Aktienmärkte und Bilanzdaten) Wir analysieren eine Stichprobe von 167 Fusionen, die zwischen 1990 und 2002 stattgefunden haben und welche 544 Unternehmen -entweder als fusionierende Parteien oder als Wettbewerber- involviert haben. Wir vergleichen eine auf "event studies" basierende Rentabilitätsmaß der Fusion zu einer alternativen Maß, die durch Bilanzdaten konstruiert wurde. Wir finden, dass diese zwei maße positiv und signifikant korrelieren besonders wenn wir ein langes Fenster um die Fusionsankündigung in dem "event study" benutzen.

Keywords: Mergers; Merger Control; Event Studies; Ex-post Evaluation (search for similar items in EconPapers)
JEL-codes: G34 K21 L4 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2006-09
New Economics Papers: this item is included in nep-bec, nep-com, nep-fin, nep-fmk and nep-law
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Is the event study methodology useful for merger analysis? A comparison of stock market and accounting data (2010)
Working Paper: Is the Event Study Methodology Useful for Merger Analysis? A Comparison of Stock Market and Accounting Data (2006)
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