The value added by private equity in mergers and acquisitions by financial institutions

Jennifer Brodmann, Charles Danso, Surendranath Rakesh Jory and Thanh Ngo

Applied Economics, 2021, vol. 53, issue 51, 5898-5916

Abstract: We compare and contrast (i) mergers and acquisitions (M&As) by financial institutions (FIs) that had the involvement of one or more private equity firms (PE) with (ii) acquisitions with no private equity involvement. We find that the M&A announcement abnormal stock returns are higher for acquisitions with- than without private equity involvement. Likewise, the post-announcement long-term annual stock returns are higher for deals with PE involvement. These deals also produce higher operating performance, and their stocks exhibit less volatility in the months following the announcement after controlling for a host of confounding variables. Our results are robust to year fixed effects, industry (i.e. business line) effects, and self-selection bias.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2021.1931657 (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:applec:v:53:y:2021:i:51:p:5898-5916

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2021.1931657

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().