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Acquiring Control in Emerging Markets: Evidence from the Stock Market / Anusha Chari, Paige P. Ouimet, Linda L. Tesar.
- Format:
- Book
- Author/Creator:
- Chari, Anusha.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w10872.
- NBER working paper series no. w10872
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Acquiring Control in Emerging Markets
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2004.
- Summary:
- When firms from developed markets acquire firms in emerging markets, market-capitalization-weighted monthly joint returns show a statistically significant increase of 1.8%. Panel data estimations suggest that the value gains from cross-border M&A transactions stem from the transfer of majority control from emerging-market targets to developed market acquirers' joint returns range from 5.8% to 7.8% when majority control is acquired. Announcement returns for acquirer and target firms estimate the distribution of gains and show a statistically significant increase of 2.4% and 6.9%, respectively. The evidence suggests that the stock market anticipates significant value creation from cross-border transactions that involve emerging-market targets leading to substantial gains for shareholders of both acquirer and target firms.
- Notes:
- Print version record
- November 2004.
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