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European cross-border acquisitions: Long-run stock returns and firm characteristics

Jensen-Vinstrup, Mathias, Damiana Rigamonti and Jesper Wulff

Journal of Multinational Financial Management, 2018, vol. 47-48, 31-45

Abstract: We investigate the long-run stock return performance of European cross-border merger and acquisition (M&A) bidders for the period 2002–2012. Our analysis shows that, though acquirers underperform their matched control firms over the thirty-six months following deal completion, this underperformance is not ascribed to the acquisition event, but rather explained by differences between acquirers and control firms in seven firm characteristics. Results are obtained by applying the augmented buy-and-hold abnormal return (BHAR) method. We enhance the robustness of our results by introducing the propensity score methodology to the analysis in addition to matching based on size and book-to-market equity.

Keywords: Cross-border; Acquisitions; Europe; Long-run return; Event study (search for similar items in EconPapers)
JEL-codes: G34 G34 G32 F3 (search for similar items in EconPapers)
Date: 2018
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