Using rival effects to identify synergies and improve merger typologies

Differentiation of collusive and efficiency-based synergies in horizontal mergers has proven difficult. The authors propose a theory-backed methodological approach to classify mergers that yields greater information on merger types and merger effects. Moreover, the methodological approach distinguishes between mergers characterized largely by collusion-based synergies and those characterized largely by efficiency-based synergies. Crucial to the proposed method is that it considers the impact of merger events not only on merging firms, as is common in the literature, but also on non-merging rivals. The authors demonstrate how the proposed approach clarifies the nature of merger activity through an event-study procedure based on stock market data on samples of large horizontal mergers drawn from the US and UK (an Anglo-American sub-sample) and from the European continent the authors demonstrate how the proposed schematic clarifies the nature of merger activity.

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Does US-China Trade War Matter on ASEAN Stock Market: Event-study Approach

SRIWIJAYA INTERNATIONAL JOURNAL OF DYNAMIC ECONOMICS AND BUSINESS ◽

10.29259/sijdeb.v4i3.161-74 ◽

2020 ◽

Vol 4 (3) ◽

pp. 161

Author(s):

Budi Setiawan

Keyword(s):

Stock Market ◽

Event Study ◽

Stock Prices ◽

Financial Stability ◽

Abnormal Returns ◽

Study Approach ◽

China Trade ◽

The Us ◽

Trade War ◽

The Impact

The trade war between the US and China by imposing tariffs has the potential to affect global financial stability. As the largest economy in the world, the US and China had been trading goods and services globally. Then, when these countries have retaliated, the tariff war will affect the global supply chain, international trade, economy, and the stock market. This research examined the effect of the US-China trade war on ASEAN stock prices using an event-study approach. The result shows that the ASEAN stock market has positive abnormal returns during pre-event period (12%). In contrast, ASEAN stock markets shifted to negative abnormal return (-7.4%) in the short-term window, indicating that the stock market is efficient. Stock price reflects the information from the market quickly. However, the impact of the trade war on the ASEAN stock market is insignificant.

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The Impact of Monetary and Fiscal Policies on the Stock Market in the United States (U.S); Evidence from Linear ARDL Framework

11th GLOBAL CONFERENCE ON BUSINESS AND SOCIAL SCIENCES - Global Conference on Business and Social Sciences Proceeding ◽

10.35609/gcbssproceeding.2020.11(132) ◽

2020 ◽

Vol 11 (1) ◽

pp. 132-132

Author(s):

Aref Emamian

Keyword(s):

United States ◽

Stock Market ◽

The United States ◽

Real Effective Exchange Rate ◽

Annual Data ◽

Fiscal Policies ◽

Long Run ◽

The Us ◽

Short Run ◽

The Impact

This study examines the impact of monetary and fiscal policies on the stock market in the United States (US), were used. By employing the method of Autoregressive Distributed Lags (ARDL) developed by Pesaran et al. (2001). Annual data from the Federal Reserve, World Bank, and International Monetary Fund, from 1986 to 2017 pertaining to the American economy, the results show that both policies play a significant role in the stock market. We find a significant positive effect of real Gross Domestic Product and the interest rate on the US stock market in the long run and significant negative relationship effect of Consumer Price Index (CPI) and broad money on the US stock market both in the short run and long run. On the other hand, this study only could support the significant positive impact of tax revenue and significant negative impact of real effective exchange rate on the US stock market in the short run while in the long run are insignificant. Keywords: ARDL, monetary policy, fiscal policy, stock market, United States

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Impact of the OMRR Operation in Fighting the Adverse Effects of COVID-19 on the Chinese Stock Market: An Event Study

Frontiers of Economics in China ◽

10.54605/fec20210304 ◽

2021 ◽

Vol 16 (3) ◽

pp. 495-520

Author(s):

Lin Guo ◽

◽

Xufei Zhang ◽

Songlei Chao ◽

◽

...

Keyword(s):

Stock Market ◽

Event Study ◽

Abnormal Return ◽

Fiscal Policies ◽

Chinese Stock Market ◽

Open Market ◽

Monetary Policies ◽

Technology Industry ◽

The Impact ◽

China’S Economy

The outbreak of the COVID-19 epidemic has had an adverse effect on China's economy. This paper uses the event study method to test and measure the impact of the open market reverse repo (OMRR) operation on the Chinese stock market. The results show that the OMRR operation generates a positive daily abnormal return and a positive daily cumulative abnormal return on average for all stocks. The impact is larger for non-state-owned enterprise (non-SOE) firms than for SOE firms, stocks of non-Hubei provinces than those of the Hubei province, and for stocks of the information transmission and technology industry than those of other industries. We suggest that our government implement more prudent monetary policies and more proactive fiscal policies.

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Loss aversion, overconfidence of investors and their impact on market performance evidence from the US stock markets

Journal of Economics Finance and Administrative Science ◽

10.1108/jefas-07-2017-0081 ◽

2020 ◽

Vol 25 (50) ◽

pp. 451-478

Author(s):

Ahmed Bouteska ◽

Boutheina Regaieg

Keyword(s):

Stock Market ◽

Economic Performance ◽

Loss Aversion ◽

Market Performance ◽

Ordinary Least Squares ◽

Company Performance ◽

Service Firms ◽

Content Type ◽

The Us ◽

The Impact

Purpose The current study aims to investigate the impacts of two behavioral biases, namely, loss aversion and overconfidence on the performance of US companies. First, the impact of loss aversion on the economic performance of companies was assessed. Second, the impact of overconfidence on market performance was discussed. Design/methodology/approach This study used around 6,777 quarterly observations on the population of US-insured industrial and services companies over the 2006-2016 period. Ordinary least squares (OLS) regression in two panel data models were used to test the hypotheses formulated for the study. Findings It was documented that the loss-aversion bias negatively affects the economic performance of companies and this is achieved for both sectors. In contrast, the findings suggest that overconfidence positively affects market performance of industrial firms but negatively affects market performance in service firms. Further robust evidence was found that overconfidence bias seems to be dominant, and hence, investors may tend to be more overconfident rather than more loss-averse. Originality/value This research can be extended by focusing on the following question: What is the impact of the contradictory (positive and negative) effects of an investor's loss aversion and overconfidence on the US company performance in case of realization of a stock market crisis or stock market crash?

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What does corporate social advocacy signal? Evidence from boycott participation decisions

Journal of Capital Markets Studies ◽

10.1108/jcms-10-2020-0040 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Pyemo N. Afego ◽

Imhotep P. Alagidede

Keyword(s):

Content Analysis ◽

Stock Market ◽

Event Study ◽

Market Valuation ◽

Social Advocacy ◽

Content Type ◽

Political Issues ◽

Stock Market Valuation ◽

Corporate Social ◽

The Impact

PurposeThis paper explores how a firm's public stand on a social-political issue can be a salient signal of the firm's values, identity and reputation. In particular, it investigates how boycott participation–conceptualized as a cue of a corporation's stand on important social-political issues–may affect the stock market valuation of that corporation, as well as how corporations legitimise their stand on the issues.Design/methodology/approachThe authors employ a mixed-methods design that uses both qualitative techniques (content analysis) and quantitative methods (event study methodology) to examine a sample of US firms who participated in a boycott campaign that sought to call attention to issues of hate speech, misinformation and discriminatory content on social media platform Facebook.FindingsFindings from the qualitative content analysis of company statements show that firms legitimise their stand on, and participation in, the boycott by expressing altruistic values and suggesting to stakeholders that their stand aligns not only with organizational values/convictions but also with the greater social good. Importantly, the event study results show that firms who publicly announced their intention to participate in the boycott, on average, earn a statistically significant positive abnormal stock return of 2.68% in the four days immediately after their announcements.Research limitations/implicationsFindings relate to a specific case of a boycott campaign. Also, the sample size is limited and restricted to US stocks. The signalling value of corporate social advocacy actions may vary across countries due to institutional and cultural differences. Market reaction may also be different for issues that are more charged than the ones examined in this study. Therefore, future research might investigate other markets, use larger sample sizes and consider a broader range of social-political issues.Practical implicationsThe presence of significant stock price changes for firms that publicly announced their decision to side with activists on the issue of hate propaganda and misinformation offers potentially valuable insights on the timing of trades for investors and arbitrageurs. Insights from the study also provide a practical resource that can be used to inform organizations' decision-making about such issues.Social implicationsTaking the lead to push on social-political issues, such as hate propaganda, discrimination, among others, and communicating their stands in a way that speaks to their values and identity, could be rewarding for companies.Originality/valueThis study provides novel evidence on the impact that corporate stances on important social-political issues can have on stock market valuation of firms and therefore extends the existing related research which until now has focused on the impact on consumer purchasing intent and brand loyalty.

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How Does Financial Sector Reacts After Special Events? An Event Study Analysis of Tunisia after the Revolution of 2011.

JOURNAL OF SOCIAL SCIENCE RESEARCH ◽

10.24297/jssr.v4i2.6662 ◽

2014 ◽

Vol 4 (2) ◽

pp. 584-599

Author(s):

Amira KADDOUR ◽

Mourad ZMAMI

Keyword(s):

Exchange Rate ◽

Stock Market ◽

Event Study ◽

Banking Sector ◽

Financial Sector ◽

Study Analysis ◽

Special Events ◽

Egarch Model ◽

The Exchange Rate ◽

The Impact

Using an event study analysis, we aim to investigate the impact of political, economic, social and terrorism events, on the Tunisian financial sector, over the period of the Tunisian Revolution; from (12)2010 to (04)2014. Based on a daily data analysis using three selected variables ; Sectoral index of performance of Tunisian banks ,Index of Tunisian stock market and the exchange rate Euro/ Dinar, the EGARCH model results have highlighted that general events decrease the return of our variables, and increase their volatility. More, results have shown that stock market is very sensitive to political and terrorism events, bad economic events increase the volatility of the exchange rate, and decrease the performance of banking sector. Political events remain the more important component, they affect negatively all the endogenous variables; coefficients in the mean equation show an important decline in term of the return of banking sector ,the stock market and the exchange rate.

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Anglo-American Intelligence Liaison and the Outbreak of the Korean War

10.3366/edinburgh/9781474428842.003.0005 ◽

2020 ◽

pp. 77-99

Author(s):

Huw Dylan ◽

David V. Gioe ◽

Michael S. Goodman

Keyword(s):

Korean War ◽

Intelligence Sharing ◽

The Us ◽

The Korean War ◽

Anglo American ◽

The Impact ◽

The Relationship ◽

Northern Korea

The chapter is concerned with the CIA’s intelligence relationships with key international partners – the Five Eyes – and wrinkles in the relationship. Despite being extremely robust in general, there were difficulties. China was a notable exception; Britain and the US had fundamentally different policies. Korea was another. The chapter illustrates the impact this had on intelligence sharing. It then goes on to detail the paucity of CIA analysis concerning Korea, and why this was the case. Documents: Minutes of the British Joint Intelligence Committee 24 August 1949; CIA’s Current Capabilities of the Northern Korea Regime.

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10. Mergers and acquisitions

Competition and Antitrust Law: A Very Short Introduction ◽

10.1093/actrade/9780198860303.003.0011 ◽

2021 ◽

pp. 106-117

Author(s):

Ariel Ezrachi

Keyword(s):

Mergers And Acquisitions ◽

Market Structure ◽

Market Power ◽

Joint Ventures ◽

Potential Benefit ◽

Horizontal Mergers ◽

Administrative System ◽

The Us ◽

Vertical Mergers ◽

The Impact

‘Mergers and acquisitions’ discusses mergers and acquisitions. While of potential benefit to society, mergers, takeovers, share acquisitions, and joint ventures also affect the market structure, and at times may reduce competition. When markets become more concentrated following a merger, we move further away from a competitive market structure to a structure in which market power might undermine the competitive process. To address this risk, the competition agency must assess the impact of the transaction. There are important procedural differences between the European administrative system and the US system in terms of the appraisal of mergers and acquisitions. Other types of mergers include: horizontal mergers, vertical mergers, and conglomerate transactions.

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Modelling sectoral spillovers in the USA (1992–2015)

Journal of Economic Studies ◽

10.1108/jes-10-2018-0378 ◽

2020 ◽

Vol 47 (3) ◽

pp. 561-595

Author(s):

Konstantinos N. Konstantakis ◽

Panayotis G. Michaelides ◽

Theofanis Papageorgiou ◽

Theodoros Daglis

Keyword(s):

Information Technology ◽

General Equilibrium ◽

Methodological Approach ◽

Robustness Analysis ◽

Autoregressive Process ◽

Spillover Effects ◽

Content Type ◽

Us Economy ◽

The Us ◽

The Impact

PurposeThis research paper uses a novel methodological approach to investigate the spillover effects among the key sectors of the US economy.Design/methodology/approachThe paper links the US sectors via a node theoretic scheme based on a general equilibrium framework, whereas it estimates the general equilibrium equation as a Global Vector Autoregressive process, taking into consideration the potential existence of dominant units.FindingsBased on our findings, the dominant sector in the US economy, for the period 1992–2015, is the sector of information technology, finance and communications, a fact that gives credence to the view that the US economy is a service-driven economy. In addition, the US economy seems to benefit by the increased labour mobility across knowledge-intensive sectors, thus avoiding the ‘employment trap’ which in turn enabled the US economy to overcome the financial crisis of 2007.Originality/valueFirstly, the paper models by means of a network approach which is based on a general equilibrium framework, the linkages between the US sectors while treating the sector of information, technology, communications and finance as dominant, as dictated by its degree of centrality in the network structure. Secondly, the paper offers a robustness analysis regarding both the existence and the identification of dominant sectors (nodes) in the US economy. Thirdly, the paper studies a wide period, namely 1992–2015, fully capturing the recent global recession, while acknowledging the impact of the global crisis through the introduction of the relevant exogenous dummy variables; Lastly and most importantly, it is the first study to apply the GVAR approach in a network general equilibrium framework at the sectoral level.

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