Stock payment and the effects of institutional and cultural differences: A study of shareholder value creation in cross-border M&amp;As

Cho, Hyejin; Ahn, He Soung

doi:10.1016/j.ibusrev.2016.10.004

Cited by 46 publications

(19 citation statements)

References 91 publications

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“…This distinction is important given the increased complexity of cross-border M&As, which embed greater information asymmetry and a higher risk of improper evaluation compared with domestic operations (Gatignon and Anderson, 1988). Moreover, monitoring the target by the acquirer is even more difficult in cross-border deals as the cost of acquiring reliable and objective information to monitor the target in the post-acquisition phase increases considerably (Fama and Jensen, 1983;Cho and Ahn, 2017). Within this framework, extra-financial information is likely to be especially valuable in the assessment of foreign targets.…”

Section: Introductionmentioning

confidence: 99%

Does CSR impact premiums in M&A transactions?

Gomes

Marsat

2018

Finance Research Letters

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Section: Introductionmentioning

confidence: 99%

Does CSR impact premiums in M&A transactions?

Gomes

Marsat

2018

Finance Research Letters

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“…Payments in cash provide a positive signal (Ross 1977) implying confidence of the acquirer on achieving post-acquisition performances (Chhabra and Popli 2018). In line with these results, findings suggest stock payments may be beneficial in cross-border deals whenever the target is located in a weak institutional environment and when cultural distance is significant (Cho and Ahn 2017). Despite the above considerations, this explanation does not shed light on the opportunistic behavior of the acquirer when negotiating with less informed targets (Shleifer and Vishny 2003).…”

Section: Discussionmentioning

confidence: 75%

The Medium of Exchange in Mergers and Acquisitions: The Cases of Travel Agencies and Tour Operators

Coelho

Girón

2020

Administrative Sciences

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The choice of the means of exchange is one of the critical decisions in mergers and acquisitions. Travel agencies and tour operating-industries compete in a volatile environment, and in addition to generating economies of scale, investments in the industry involve important sunk costs. This paper’s focus is on the determinants of the medium of exchange in mergers and acquisitions in the travel and tour-operating industries. Previous research on the ‘law and finance’ perspectives argues that some country of origin legal systems offer better investment protection to investors. Accordingly, civil law-based systems offer weaker protection to investors when compared to common-law-based systems. For this purpose, we use a logistics regression to model the determinants of cash in a sample of 750 mergers and acquisitions by combining the research streams above. Our results provide evidence of the relationship between investor protection and the use of cash.

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“…The extent literature also has recognised the importance of event study to measure the effect of announcement of merger and acquisition (M&A) on shareholders' wealth. Cho and Ahn (2017) investigated the role of stock payment that results in ownership sharing foreign targets. They found that stock payment in cross-border M&As has a detrimental effect on shareholder value because of the negative signalling effect and stock payment can be beneficial when a foreign target located in a weaker institutional environment and when the cultural distance is large.…”

Section: Review and Literaturementioning

confidence: 99%

Reaction of Stock Price to Frauds’ Announcements: Evidence from Indian Banking Sector

Sharma

Verma

2020

Asia-Pacific Journal of Management Research and Innovation

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This paper is an attempt to investigate the reaction of stock price of Indian banks with respect to announcements of frauds. The Event Study Methodology is used to examine the impact of frauds’ announcements to stock price of banks which experienced fraud. The fraud cases which exceed ₹1,000 crores are considered for the period from January 2014 to December 2018. The results indicate that the fraud announcements do affect the stock price of banks which experienced fraud. In majority of cases of frauds under consideration, the study found significant abnormal loss which further supported by the results of abnormal volume ratio. The highest abnormal loss is found in the stock price of Punjab National Bank (8.74 per cent) which involves the scam committed by the Nirav Modi. Due to increased frauds in the banking sector, the confidence of the investors adversely affects which may further lead to consequences on concerned banks. In this direction, the results of the study have importance for the policy makers and regulators for analysing the behaviour of stock price with respect to the announcements of frauds in the Indian banking sector.

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Stock payment and the effects of institutional and cultural differences: A study of shareholder value creation in cross-border M&As

Cited by 46 publications

References 91 publications

Does CSR impact premiums in M&A transactions?

Does CSR impact premiums in M&A transactions?

The Medium of Exchange in Mergers and Acquisitions: The Cases of Travel Agencies and Tour Operators

Reaction of Stock Price to Frauds’ Announcements: Evidence from Indian Banking Sector

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