Stock Market Reaction to Mergers and Acquisitions in Anticipation of a Subsequent Related Significant Event: Evidence from the Korean Telecommunications Industry

Changi Nam (), Dong-Hoon Yang (), Myeong-Cheol Park (), Gil-Hwan Oh () and Jong-Hyun Park ()
Additional contact information
Changi Nam: School of IT Business, Information and Communications University, P.O. Box 77, Yusong-gu, Daejon 305-600, Korea
Dong-Hoon Yang: School of IT Business, Information and Communications University, P.O. Box 77, Yusong-gu, Daejon 305-600, Korea
Myeong-Cheol Park: School of IT Business, Information and Communications University, P.O. Box 77, Yusong-gu, Daejon 305-600, Korea
Gil-Hwan Oh: IT Technology Policy and Information Division, Institute of Information Technology Assessment (IITA), 52, Eoeun-dong, Yuseong-gu, Daejeon, 305-333, Korea
Jong-Hyun Park: IT Services Research Division, Electronics and Telecommunications Research Institute (ETRI), 161, Gajeong-dong, Yuseong-gu, Daejeon, 305-359, Korea

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2005, vol. 08, issue 02, 185-200

Abstract: The objective of this paper is to assess the effect of mergers and acquisitions on shareholder wealth when subsequent related significant events are anticipated. We identify a particular merger and acquisition between telecommunication companies in Korea and examine whether it conveys good or bad news to stock market participants. We hypothesize and find that mergers and acquisitions are interpreted as good news by the marketplace when they are expected to be accompanied by a subsequent related significant event, in our case granting of a government license for the IMT-2000 mobile service.

Keywords: Mergers and acquisitions; telecommunications industry; IMT-2000; mobile service (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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DOI: 10.1142/S0219091505000427

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