Journal article
Abnormal returns to rivals of acquisition targets: A test of the `acquisition probability hypothesis
Journal of financial economics, v 55(2), pp 143-171
01 Feb 2000
Abstract
We develop and test the Acquisition Probability Hypothesis, which asserts that rivals of initial acquisition targets earn abnormal returns because of the increased probability that they will be targets themselves. On average, rival firms earn positive abnormal returns regardless of the form and outcome of acquisition. These returns increase significantly with the magnitude of surprise about the initial acquisition. Moreover, the cross-sectional variation of rival abnormal returns in the announcement period is systematically related to variables associated with the probability of acquisition. In addition, rivals that subsequently become targets earn significantly higher abnormal returns in the announcement period.
Metrics
Details
- Title
- Abnormal returns to rivals of acquisition targets: A test of the `acquisition probability hypothesis
- Creators
- Moon H Song - San Diego State UniversityRalph A Walkling - Fisher College
- Publication Details
- Journal of financial economics, v 55(2), pp 143-171
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000085195100001
- Scopus ID
- 2-s2.0-0013246703
- Other Identifier
- 991021881496504721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics