Title: Acquiring firm characteristics and stock market efficiency: a case study approach

Authors: Lin Lin, Jenifer Piesse, De-Wai Chou

Addresses: Department of Banking and Finance, National Chi-Nan University, 1 University Rd., Puli, Natou Hsien, Taiwan 545, ROC. ' Department of Management, School of Social Science and Public Policy, King's College, University of London, 150 Stamford St, London SE1 9NN, UK and University of Stellenbosch, Souh Africa. ' Department of Finance, Yuan Ze University, 135, Yuan-Tang Rd., Jung-Li, Taiwan 32003, ROC

Abstract: Previous studies have considered the market for corporate control, but have tended to assume that this is a strategy undertaken by financially robust acquiring firms. This paper provides five case studies that reflect that both acquirers and targets have differing financial characteristics. In depth examination has found that the ambiguous results in the literature are due to a lack of understanding of the complexity and diversity of takeover participants. These results indicate that while the market is efficient, there are a number of different effects of takeover that relate to the diverse nature of firms and their environment.

Keywords: bankruptcy prediction; conditional probability analysis; takeovers; efficient markets; firm characteristics; stock market efficiency; financial characteristics; acquisitions.

DOI: 10.1504/IJSTM.2005.007513

International Journal of Services Technology and Management, 2005 Vol.6 No.6, pp.576 - 598

Published online: 31 Jul 2005 *

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