Revenue enhancement and wealth effects of mergers and acquisitions in Asian emerging markets Online publication date: Thu, 06-May-2010
by Jianyu Ma, Jose A. Pagan, Yun Chu
International Journal of Revenue Management (IJRM), Vol. 4, No. 2, 2010
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.
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