New evidence on alliance experience and acquisition performance

2015 ◽  
Vol 32 (1) ◽  
pp. 53-73 ◽  
Author(s):  
Yiwei Fang ◽  
Dawei Jin ◽  
Xian Sun ◽  
Haizhi Wang
Keyword(s):  
Organizational Learning ◽  
Large Scale ◽  
Abnormal Returns ◽  
Short Term ◽  
New Markets ◽  
Stock Performance ◽  
Content Type ◽  
Acquiring Firms ◽  
Alliance Experience

Purpose – This study aims to build on the organizational learning theory and propose a complex strategy by combining strategic alliance with subsequent acquisitions to penetrate new product markets. The authors empirically examined whether and to what extent preacquisition alliance experience affects the short- and long-term stock performance of acquiring firms. Design/methodology/approach – Data on acquisitions, in which the acquirers have experience from preacquisition alliance activities in their targets’ respective industry, were collected. Diversifying acquisitions were focused upon to ensure that preacquisition alliance experience is the major source of organizational learning. A standard event study to examine acquirers’ abnormal returns was used and a Fama-French calendar-time portfolio approach to gauge long-run abnormal stock performance was adopted. In addition, regression analysis was conducted to investigate the alliance–acquisition relationship, controlling a set of variables capturing firm and acquisition characteristics. Findings – It has been documented that in the short run, alliance experience may not always benefit acquirers’ stock performance surrounding the acquisition announcements. In particular, for acquiring firms experiencing negative cumulative abnormal returns, investors value alliance experience negatively. However, for up to 36 months after acquisitions, acquirers with alliance experience outperform their counterparts in almost every acquisition category regardless of the short-term announcement returns. Originality/value – The current study has used a large-scale representative sample to investigate the dynamic interaction between alliances and acquisitions as two organizational forms for firms to grow. Findings indicate that firms can deliberately learn from their alliance activities and, later on, enter new markets through acquisitions. More importantly, it was found that, at least for some acquirers, preacquisition alliance activities are associated with worse short-term stock price performance because of possible information spillover and lifted entry barriers. It was confirmed that short-term pain nets long-term gains for acquirers heading into new markets.

Excess offer premium and acquirers’ performance

2018 ◽  
Vol 35 (3) ◽  
pp. 407-425
Author(s):  
Won-Seok Woo ◽  
Suhyun Cho ◽  
Kyung-Hee Park ◽  
Jinho Byun
Keyword(s):  
Market Reaction ◽  
Abnormal Returns ◽  
Market Returns ◽  
Content Type ◽  
Acquiring Firms ◽  
Study Methodology ◽  
Long Term Performance ◽  
Term Performance ◽  
The Impact

PurposeThis paper aims to investigate the causes of mergers and acquisitions (M&A) deals that acquiring firms pay excess premium beyond the market-expected level and examine the relation between the announcement return and long-term performance of the acquiring firms.Design/methodology/approachBased on a sample of 1,767 US firms’ M&A deals from 2000 to 2014, the authors use the expectation model used by Ang and Ismail (2015) to measure normal offer premium in an M&A deal. They conduct the standard event study methodology to observe the market reaction for acquiring companies on the announcement day. Buy-and-hold abnormal returns are used for the main explanatory variable so as to find the impact of the premium paid on the long-term performance of the acquirer.FindingsFirst, acquiring firms are faced with negative market returns when acquiring firms pay excess premiums. Second, poor long-term performance of the acquiring firms is observed if acquiring firms pay excess premium. Finally, the negative relation between excess premium and acquiring firms’ long-term performance weakens, as the sample period becomes longer.Research limitations/implicationsThe hypotheses and results of the empirical study are as follows. First, the acquirer’s market reaction on the announcement day is negative when it pays an excess offer premium. This is because the market perceives the premium to be greater than the value of the deal, which damages the value of the market, as it is not perceived as a proxy for future synergy. Second, the acquirer’s long-term performance is low when it pays the excess offer premium. It is the same result as the acquirer’s market reaction on the announcement day. This shows that the excess premium does not result in either a short-term positive reaction or a long-term profit for the acquiring shareholders. However, it is found that the relationship between the excess premium and the long-term performance of the acquirer decreases with time. This is because the long-term performance of the acquirer is more affected by management and other events after the deal.Originality/valueThe authors divide the total premium paid into the normal offer premium and the excess premium, and their focus is on the excess premium part. The main contribution of this paper is that it analyzes how the excess premium affects the market reaction on the announcement day and the long-term performance of acquiring firms.

Return reversal effect in Shanghai A share market

2019 ◽  
Vol 45 (6) ◽  
pp. 698-715 ◽  
Author(s):  
Krishna Reddy ◽  
Muhammad Ali Jibran Qamar ◽  
Marriam Rao
Keyword(s):  
Stock Market ◽  
Stock Markets ◽  
Abnormal Returns ◽  
Short Term ◽  
Content Type ◽  
Reversal Effect ◽  
Chinese Stock Markets ◽  
Developed Stock Markets ◽  
Return Reversal

Purpose The existing literature about return reversal effect in Chinese stock markets is inconclusive and controversial. Therefore, the purpose of this paper is to investigate the presence of return reversal effect in the Shanghai A stock market. Design/methodology/approach The authors used the late-stage contrarian strategy of Malin and Bornholt (2013) for the period March 2011‒March 2016. Findings The results show that there is a long-term return reversal effect in the Shanghai A stock market for the period March 2011‒March 2016. When portfolios are in the formation period (P=24 months), the excess returns are significant in the holding period, Q=6, 9, 12, 24 months. Further, there is also a significant short-term momentum effect in the Shanghai A stock market. For the robustness check, a new reversal factor was introduced into the Fama‒French three-factor model. Results show that portfolios have a smaller size and have lower book-to-market ratios; the return reversal factor explains a portion of the abnormal returns and coefficient of the reversal effect is significant. Research limitations/implications The authors caution readers from generalizing the findings of this study, as the sample is small and the focus is only on A stocks listed on the Shanghai Stock Exchange. Originality/value The present research expands the current literature by providing a comprehensive information about the presence of the long-term and short-term return reversal effects in Shanghai A stock market. Furthermore, the Chinese stock markets have distinctive features in comparison to the developed stock markets in terms of government control, institutional structure, liquidity, cultural background, etc. Such differences affect the pattern in stock returns compared with those observed in developed stock markets. Contrary to previous studies, the present study also accounts for robustness checks. Finally, it also evaluates the possible reasons for the return reversal effect in the Shanghai market.

scholarly journals Short- And Long-Term Wealth Gains From UK Takeovers: The Case Of The Financial Industry

2014 ◽  
Vol 30 (4) ◽  
pp. 1253 ◽  
Author(s):  
Sabri Boubaker ◽  
Taher Hamza
Keyword(s):  
Abnormal Returns ◽  
Wealth Effects ◽  
Financial Industry ◽  
Short Term ◽  
Long Run ◽  
Acquiring Firms ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Term Performance

The present study analyzes the short- and long-term performance of UK financial acquiring firms by examining a sample of 40 takeovers over the period 19962007. In particular, it investigates i) the short- and long-term stock return performance of these acquiring firms and ii) the relation between their short-term abnormal return around the announcement date of takeovers and their long-term performance. The event study methodology shows that bidders experience significant short-term wealth destruction. In contrast, both the buy-and-hold abnormal returns and bidders portfolio return approaches indicate positive and significant wealth effects over the long run. Business cycle analysis shows that acquirers obtain significantly higher returns during downward financial market cycles. Furthermore, the results show that the market reaction to the bid announcement better predicts bidders long-term performance in the case of positive short-term abnormal returns.

Map-less long-term localization in complex industrial environments

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zhe Liu ◽  
Zhijian Qiao ◽  
Chuanzhe Suo ◽  
Yingtian Liu ◽  
Kefan Jin
Keyword(s):  
Visual Information ◽  
Point Cloud ◽  
Large Scale ◽  
Location Tracking ◽  
Short Term ◽  
Global Localization ◽  
Content Type ◽  
Environment Changes ◽  
Industrial Environments

Purpose This paper aims to study the localization problem for autonomous industrial vehicles in the complex industrial environments. Aiming for practical applications, the pursuit is to build a map-less localization system which can be used in the presence of dynamic obstacles, short-term and long-term environment changes. Design/methodology/approach The proposed system contains four main modules, including long-term place graph updating, global localization and re-localization, location tracking and pose registration. The first two modules fully exploit the deep-learning based three-dimensional point cloud learning techniques to achieve the map-less global localization task in large-scale environment. The location tracking module implements the particle filter framework with a newly designed perception model to track the vehicle location during movements. Finally, the pose registration module uses visual information to exclude the influence of dynamic obstacles and short-term changes and further introduces point cloud registration network to estimate the accurate vehicle pose. Findings Comprehensive experiments in real industrial environments demonstrate the effectiveness, robustness and practical applicability of the map-less localization approach. Practical implications This paper provides comprehensive experiments in real industrial environments. Originality/value The system can be used in the practical automated industrial vehicles for long-term localization tasks. The dynamic objects, short-/long-term environment changes and hardware limitations of industrial vehicles are all considered in the system design. Thus, this work moves a big step toward achieving real implementations of the autonomous localization in practical industrial scenarios.

The Sarbanes-Oxley Act and corporate acquisitions

2017 ◽  
Vol 43 (4) ◽  
pp. 452-470 ◽  
Author(s):  
Harjeet Singh Bhabra ◽  
Ashrafee Tanvir Hossain
Keyword(s):  
Market Competition ◽  
Abnormal Returns ◽  
Publicly Traded ◽  
Short Term ◽  
Corporate Acquisitions ◽  
Content Type ◽  
Tender Offers ◽  
Term Performance ◽  
The Impact

Purpose The purpose of this paper is to analyze and compare the performance of corporate acquisitions between the pre- and post-SOX periods, using both short-term and long-term analyses. Design/methodology/approach The sample includes 9,463 mergers and tender offers undertaken by publicly traded US firms between 1996 and 2009. The authors used the standard event study methodology for short-term performance analysis; Berkovitch and Narayanan (1993) method to identify merger motives; and standard benchmark adjusted return on assets (sales) (Barber and Lyon, 1996) and buy-and-hold abnormal returns (Mitchell and Stafford, 2000) to analyze long-term performance. Findings Compared to the pre-SOX period, US acquirers experience significantly higher announcement returns in the post-SOX period; the results are robust to various controls like bidder, target and deal characteristics, bidder management quality, and product market competition. Similar results (in favor of post-SOX US acquirers) are obtained with long-term post-acquisition operating and stock performance analyses. Research limitations/implications This paper only addressed domestic acquisitions. Originality/value This paper adds to the growing body of research on the impact of SOX on publicly traded US corporations. By examining corporate acquisitions, an important long-term investment decision for a firm, the paper shows that despite the complex nature of SOX, substantial compliance costs and the unintended negative consequence it engendered, the act had a beneficial impact in an important area of corporate finance.

scholarly journals Two Stage Continuous Gesture Recognition Based on Deep Learning

Electronics ◽  
2021 ◽  
Vol 10 (5) ◽  
pp. 534
Author(s):  
Huogen Wang
Keyword(s):  
Gesture Recognition ◽  
Large Scale ◽  
Short Term Memory ◽  
Short Term ◽  
Hand Motion ◽  
Spatiotemporal Features ◽  
Spatiotemporal Information ◽  
Video Frames ◽  
Depth Sequences

The paper proposes an effective continuous gesture recognition method, which includes two modules: segmentation and recognition. In the segmentation module, the video frames are divided into gesture frames and transitional frames by using the information of hand motion and appearance, and continuous gesture sequences are segmented into isolated sequences. In the recognition module, our method exploits the spatiotemporal information embedded in RGB and depth sequences. For the RGB modality, our method adopts Convolutional Long Short-Term Memory Networks to learn long-term spatiotemporal features from short-term spatiotemporal features obtained from a 3D convolutional neural network. For the depth modality, our method converts a sequence into Dynamic Images and Motion Dynamic Images through weighted rank pooling and feed them into Convolutional Neural Networks, respectively. Our method has been evaluated on both ChaLearn LAP Large-scale Continuous Gesture Dataset and Montalbano Gesture Dataset and achieved state-of-the-art performance.

The chicken and egg story of a call centre in Malaysia

2021 ◽  
Vol 11 (3) ◽  
pp. 1-25
Author(s):  
Alan Fun-Foo Chan ◽  
Keng-Kok Tee ◽  
Thanuja Rathakrishnan ◽  
Jo Ann Ho ◽  
Siew-Imm Ng
Keyword(s):  
Undergraduate Students ◽  
Call Centre ◽  
Short Term ◽  
Content Type ◽  
Security Technologies ◽  
Academic Level ◽  
Key Account ◽  
Substandard Performance ◽  
Alternative Solutions

Learning outcomes After attempting the case, users are able to: analyse issues and problems faced by a call centre in Malaysia. Determine the root causes of the problems faced by call centre employees and generate alternative solutions to solve the problems faced by the company and to ensure the sustainability of the business. Case overview/synopsis This case was about the challenges faced by Daniel, the General Manager of an integrated security protection system company, Secure First (SF). Despite investing in the latest security technologies, conducting a major overhaul of the procedures, introducing an enhanced digital system at the call centre and providing training to the call agents, it was on the verge of losing its important long-term client due to its substandard performance. The client experienced major losses due to break-ins. After a thorough investigation, the problem surfaced in their call centre. Most of the staff were not familiar with the newly adopted system. The circumstances worsened when many of the call centre’s senior employees were tendering their resignations. The case discusses the aspect of employee satisfaction, staff performance that led to the turnover issue amongst employees in a call centre. The case explores what short-term and long-term strategies could Daniel suggest to change the call centre’s course to retain SF’s key account in times of desperation. Complexity academic level This case has a moderate level of difficulty and may be used in undergraduate students. Supplementary materials Teaching notes are available for educators only. Subject code CSS 6: Human resource management.

Contemporaneous or causal? Evaluating the triumvirate of insolvency risk, capitalization and efficiency in Indian commercial banking

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navendu Prakash ◽  
Shveta Singh ◽  
Seema Sharma
Keyword(s):  
Cost Efficiency ◽  
Banking Sector ◽  
Generalized Method Of Moments ◽  
Commercial Banking ◽  
Seemingly Unrelated Regression ◽  
Bank Capital ◽  
Short Term ◽  
Content Type ◽  
Insolvency Risk

PurposeThis paper empirically examines the short-term and long-term associations between risk, capital and efficiency (R-C-E) in the Indian banking sector across 2008–2019 to answer the presence of causation or contemporaneousness in the R-C-E nexus.Design/methodology/approachThe paper focuses on three objectives. First, the authors determine short-term causality in the risk–efficiency relationship by studying the simultaneous influence of a wide array of banking risks on DEA-based technical and cost efficiency in static and dynamic situations. Second, the authors introduce bank capital and contemporaneously determine the interplay between R-C-E using seemingly unrelated regression equation (SURE) and three-staged least squares (3SLS). Last, the authors assess stability in inter-temporal associations using Granger causality in an autoregressive distributed lag (ARDL) generalized method of moments (GMM) framework.FindingsThe authors contend that high capital buffers reduce insolvency risk and increase bank stability. Technically efficient banks carry lesser equity buffers, suggesting a trade-off between capital and efficiency. However, capitalization makes banks more technically efficient but not cost-efficient, implying that over-capitalization creates cost inefficiencies, which, in line with the cost skimping hypothesis, forces banks to undertake risk. Concerning causal relationships, the authors conclude that inefficiency Granger-causes insolvency and increases bank risk. Further, steady increases in capital precede technical and cost efficiency improvements. The converse also holds as more efficient banks depict temporal increases in capitalization levels.Originality/valueThe paper is perhaps the first that acknowledges the influence of the “time” perspective on the R-C-E nexus in an emerging economy and advocates that prudential regulations must focus on short-term and long-term intricacies among the triumvirate to foster a stable banking environment.

Labor lawsuits and debt maturity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Omer Unsal
Keyword(s):  
Chief Executive ◽  
Debt Maturity ◽  
Employee Relations ◽  
Short Term ◽  
Content Type ◽  
Negative Effect ◽  
Debt Market ◽  
Legal Fees

Purpose This paper aims to investigate how firms’ relationships with employees define their debt maturity. The authors empirically test the role of employee litigations in influencing firms’ choice of short-term versus long-term debt. The authors study employee relations by analyzing the importance of the workplace environment on capital structure. Design/methodology/approach The author’s test hypotheses using a sample of US publicly traded firms between 2000 and 2017, including 3,056 unique firms with 4,256 unique chief executive officer, adopting the fixed effect panel model. Findings The authors document that employee litigations have a significant negative effect on the use of short-term debt and a significant positive affect on long-term debt. Employee litigations, along with legal fees, outcomes and charging parties, matter the most in explaining debt maturity. In addition, frequently sued firms abandon the short-term debt market and use less shareholders’ equity to finance their operations while relying more on the longer debt market. Originality/value To the best of the authors’ knowledge, this is the first study to examine the role of employee mistreatment in debt maturity choice. The study extends the lawsuit and finance literature by examining unique, hand-collected data sets of employee lawsuits, allegations, violations, settlements, charging parties, case outcomes and case durations.

The transition of a socio-technical system to a smart grid: illustrated with the Indian electricity network

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lakshminarayana Kompella
Keyword(s):  
Technical System ◽  
Transition Theory ◽  
Short Term ◽  
Indian States ◽  
Content Type ◽  
External Pressures ◽  
Policy Systems ◽  
Transition Trajectory ◽  
Practical Implications

Purpose This paper aims to explain transitions in a socio-technical system characterized by non-economic entities that influence economic activity, i.e. embeddedness and coalitions. The selected socio-technical system is an Indian electric network with an interventionist policy. Its embeddedness and coalitions drive the transition. The insights from such analysis expand socio-technical transition theory and provide valuable insights to practitioners in their policymaking. Design/methodology/approach The authors need to observe the effects of non-economic institutions in their setting. Moreover, in India, the regional policies influence decision-making; therefore, selected two Indian states. The two Indian states, along with their non-economic entities, provided diverse analytic and heuristic views. Findings The findings show that coalitions, with their embeddedness in the absence of any mediating policy systems, act as external pressures and influence innovation and the socio-technical system’s transition trajectory. Their coalitions’ embeddedness follows a shaping, not selection logic. Thereby influence innovations in cumulating as stable designs. Such an approach provides benefits in the short-term but not in the long-term. Research limitations/implications The study selected two states and examined two of the four trajectories. By considering other states, the authors can obtain more renewable energy investments and further insights into the transformational trajectory. Practical implications The study highlights the coalition dynamics specific to the Indian electric power network and its transition trajectories. The non-economic entities influenced transition trajectories, innovation and policymaking of the socio-technical system. Originality/value The study expands the socio-technical transition theory by including embeddedness. The embeddedness brings a shaping logic instead of a selection logic.

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