Revenue enhancement and wealth effects of mergers and acquisitions in Asian emerging markets

Jianyu Ma, Jose A. Pagan and Yun Chu

International Journal of Revenue Management, 2010, vol. 4, issue 2, 179-194

Abstract: Revenue enhancement and value creation are core issues of mergers and acquisitions (M&A). Revenue enhancing synergy associated with cross-industry M&A is supported by Asian emerging markets. Both within-industry M&A and cross-industry M&A deals realise significant positive abnormal returns. The difference between the two categories of M&A is statistically significant in a three-day window, but not statistically significant in a two-day window. Information leakages may be driving the larger valuation effects because a three-day window includes one day before the announcement date. Since large firms tend to diversify their business, the result that cross-industry M&A deals realise lower abnormal returns than within-industry may be driven by the firm size effect.

Keywords: revenue enhancement; company acquisitions; abnormal returns; SIC; Standard Industry Code; Standard Industrial Classification; wealth; Asia; emerging markets; value creation; within-industry mergers; cross-industry mergers; statistical significance; information leakages; valuation effects; firm size; merger announcements; Indonesia; Thailand; Singapore; Philippines; Malaysia; India; Taiwan; South Korea; Hong Kong; China; revenue management. (search for similar items in EconPapers)
Date: 2010
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