Merger imbalance and returns in international equity markets

Adam Zaremba , Przemysław Grobelny

Abstract

At the global level, the mispricing theory of mergers by Shleifer and Vishny may imply that a significant number of targets acquired in a given country is a sign of market-wide undervaluation whereas intense acquisition activity indicates overvaluation. The present study develops a measure of merger imbalance that compares the quantity of targets and acquirers in a local market and tests significance of this variable for country-level asset pricing. The results prove that countries with a high merger imbalance significantly outperform countries with a low merger imbalance. The research is based on data from 46 countries for the years 1999–2015. The outcomes are robust to many considerations, and the findings support the theory of stock market-driven acquisitions.
Author Adam Zaremba (WZ / KIiRK)
Adam Zaremba,,
- Department of Investment and Capital Markets
, Przemysław Grobelny (WZ / KIiRK)
Przemysław Grobelny,,
- Department of Investment and Capital Markets
Journal seriesInvestment Analysts Journal, ISSN 1029-3523, (A 20 pkt)
Issue year2017
Vol46
No2
Pages117-131
Publication size in sheets0.7
Keywords in EnglishMergers and acquisitions, country-selection strategies, country-level effects, international asset pricing, return predictability, corporate-behavioural finance
ASJC Classification1402 Accounting; 2002 Economics and Econometrics; 2003 Finance
DOIDOI:10.1080/10293523.2016.1277849
URL https://www.tandfonline.com/doi/abs/10.1080/10293523.2016.1277849
Languageen angielski
Score (nominal)20
Score sourcejournalList
ScoreMinisterial score = 20.0, 27-03-2020, ArticleFromJournal
Publication indicators WoS Citations = 3; Scopus SNIP (Source Normalised Impact per Paper): 2017 = 0.505; WoS Impact Factor: 2017 = 0.71 (2) - 2017=0.735 (5)
Citation count*6 (2020-07-09)
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
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