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http://hdl.handle.net/10397/93354
Title: | Financial constraints and synergy gains from mergers and acquisitions | Authors: | Duan, Y Jin, Y |
Issue Date: | Feb-2019 | Source: | Journal of international financial management and accounting, Feb. 2019, v. 30, no. 1, p. 60-82 | Abstract: | This paper examines mergers and acquisitions motivated by financial constraints. Synergy gain is measured as the cumulative abnormal return of a value-weighted portfolio of the acquirer and the target around the acquisition announcement. By constructing a financial constraint difference between the target and the acquirer, we find a positive relationship between the financial constraint difference and synergy gains generated from the acquisition. The positive effect of the financial constraint difference is only significant for high growth targets and severely constrained targets. The acquirer's corporate governance also enhances the synergy gains created from the financial constraint difference. Additional evidence shows that both acquirer's and target's shareholders benefit from the financial constraint difference. Our results are robust for different measures of financial constraint. | Keywords: | Acquisitions Financial constraint Mergers Synergy gains |
Publisher: | Wiley-Blackwell | Journal: | Journal of international financial management and accounting | ISSN: | 0954-1314 | DOI: | 10.1111/jifm.12091 | Rights: | © 2018 John Wiley & Sons Ltd This is the peer reviewed version of the following article: Duan, Y., & Jin, Y. (2019). Financial constraints and synergy gains from mergers and acquisitions. Journal of International Financial Management & Accounting, 30(1), 60-82, which has been published in final form at https://doi.org/10.1111/jifm.12091. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited. |
Appears in Collections: | Journal/Magazine Article |
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