The impact of merger announcements on stock prices : The rejection of the merger
نویسندگان
چکیده
Can we detect the merger paradox in the year 1908 in Germany? An event-study method that uses daily returns in contrast to former historical research gives answers. The merger paradox is not confirmed by our data, and the adaptation process of stock prices according to newly available information is finished in a few days around the event. In addition, we use cumulated abnormal returns as dependent variable to detect what affects returns. Controlling for direct and indirect impacts, we construct a simultaneous equation system. We uncover that banks exhibit remarkable positive abnormal returns in comparison to other lines of business.
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