Shareholders’ indifference… short-term market reaction to firms’ first and subsequent acquisitions: evidence from China

Dmytro Osiichuk and Paweł Wnuczak

Economic Research-Ekonomska Istraživanja, 2022, vol. 35, issue 1, 3490-3511

Abstract: Having analysed the history of acquisitions by public Chinese companies over the period of 1996–2020, we document no persistent statistically significant short-term market reaction upon deal completion. Short-term cumulative abnormal returns are non-different from zero regardless of whether the acquisition is the first or one of many on acquirers’ record, whether it is domestic or cross-border or whether it is vertical or horizontal as well as regardless of industry and declared purpose of acquisition. In the overwhelming majority of cases, acquirers’ prior acquisition experience plays no role in shaping short-term post-acquisition returns. Lower returns are associated with serial acquirers especially if the series of acquisitions occurs within the same industry. Likewise, significantly lower cumulative returns are observed if the acquiree is a state-owned entity. Overall, the markets appear to attach no abnormal returns to firms’ inorganic growth regardless of its span across geographies, industries and time.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1331677X.2021.1997621 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:reroxx:v:35:y:2022:i:1:p:3490-3511

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rero20

DOI: 10.1080/1331677X.2021.1997621

Access Statistics for this article

Economic Research-Ekonomska Istraživanja is currently edited by Marinko Skare

More articles in Economic Research-Ekonomska Istraživanja from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().