The effects of foreign acquisitions on the value of industry peers
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Type :
Article
Publication Status :
Published online
Access :
Attribution 4.0 International
openAccess
https://creativecommons.org/licenses/by/4.0/
openAccess
https://creativecommons.org/licenses/by/4.0/
Abstract
This paper studies how industry peers' stock prices respond when another firm in the industry is acquired by a foreign firm. The average stock price reactions of industry peers in horizontal foreign acquisitions around deal announcements are significantly negative. Peers' returns are more negative in growing, less specialized, and competitive industries. Moreover, the negative stock price reactions of industry peers are related to future decreases in their operating performance. Overall, these results suggest that foreign acquisitions have strong competitive effects for the industry peers of U.S. target companies.
Source :
Journal of Financial and Quantitative Analysis
Date :
2023-03
Publisher :
Cambridge University Press
URI
http://hdl.handle.net/10679/8873https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/article/effects-of-foreign-acquisitions-on-the-value-of-industry-peers/37B5B3F112446C8F801803F2A8CE3338
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