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The impact of market cycle on the performance of Singapore acquirers

Nitin Pangarkar and Junius R. Lie

Strategic Management Journal, 2004, vol. 25, issue 12, 1209-1216

Abstract: In this paper, we hypothesize that acquisitions undertaken during low market cycles will exhibit better performance than other acquisitions for two key reasons: lower likelihood of overpayment due to hubris and ease in implementing restructuring initiatives such as retrenchment. We define performance as the cumulative abnormal returns surrounding the acquisition event and deploy a trend‐based measure for market cycle. Based on an analysis of 115 acquisitions by Singapore firms between 1990 and 1999, we find strong support for the hypothesized relationship. Copyright © 2004 John Wiley & Sons, Ltd.

Date: 2004
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https://doi.org/10.1002/smj.434

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