The Acquisition of Non Public Firms in Europe: Bidders’ Returns, Payment Methods and Stock Market Evolution

Aim: We analyze stock market reactions to merger and acquisition announcements for firms in Europe and contribute to the literature by providing empirical evidence how the decisions with respect to alternative financing sources (equity or debt) and the methods of payment (cash or stock) affect the magnitude of the valuation effects. Research design: An event study methodology is applied to 717 M&A transactions. We analyze the size of the cumulative abnormal returns using the financing sources and payment methods and other variables as the relevant determinants. Findings: The cumulative abnormal results suggest that target shareholders and bidder shareholders in private deals benefit from mergers and acquisitions. The effect found is centered around the announcement date, making our findings consistent with market efficiency. Debt financed deals outperform equity financed deals and cash paid M&A outperform stock paid M&As, due to information asymmetry, signaling and agency effects. Originality: This study adds to our understanding of the relevance of the financing sources and the payment methods for mergers and acquisitions in Europe. Implications: This study may help practitioners to better assess the valuation effects of alternative financing sources and payment methods when acquiring other firms. JEL: G32, G34

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An analysis on stock market evolution based on birth-death process

2010 International Conference on Management Science & Engineering 17th Annual Conference Proceedings ◽

10.1109/icmse.2010.5719946 ◽

2010 ◽

Author(s):

Zhao Peng-ju

Keyword(s):

Stock Market ◽

Death Process ◽

Market Evolution ◽

Birth Death

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Firm Size, Firm Age, and Firm Profitability: Evidence from China

JABM JOURNAL of ACCOUNTING - BUSINESS & MANAGEMENT ◽

10.31966/jabminternational.v28i1.829 ◽

2021 ◽

Vol 28 (1) ◽

pp. 101

Author(s):

Md. Jahidur Rahman ◽

Liu Yilun

Keyword(s):

Stock Market ◽

Firm Size ◽

Fixed Effects ◽

Negative Relationship ◽

Future Research ◽

Fixed Effects Model ◽

Firm Age ◽

Public Firms ◽

Firm Profitability ◽

Size Firm

This study aims to investigate the relationship among firm size, firm age, and firm profitability in China’s stock market. We use data from all the public firms in China’s stock market from 2008 to 2018 and adopt a fixed effects model to examine these relationships. We find a positive relationship between firm size and profitability and a negative relationship between firm age and profitability, which is consistent with existing studies conducted in other countries. The findings of our study can contribute to future research in China by offering a sound basis and appropriate reference point, given that no previous research has been conducted in China on this exact topic. This study also offers a comprehensive model for use in future studies.

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FORECASTING, VALUATION AND PORTFOLIO RETURNS OF STOCK MARKET EVOLUTION: PROBLEMS, PARADOXES AND EFFICIENT INFORMATION. WORLDWIDE IMPLICATIONS AND ROMANIAN EVIDENCE

Journal of Business Economics and Management ◽

10.3846/jbem.2019.11355 ◽

2019 ◽

Vol 21 (1) ◽

pp. 87-114

Author(s):

Florin Turcaș ◽

Florin Cornel Dumiter ◽

Petre Brezeanu ◽

Marius Boiță

Keyword(s):

Stock Market ◽

Time Frame ◽

Market Evolution ◽

Reasonable Time ◽

Empirical Results ◽

Portfolio Returns ◽

Eclectic Approach ◽

Reasonable Time Frame ◽

Efficient Information ◽

Portfolio Return

The purpose of this paper is to make a quantitative and qualitative critical analyse regarding the three important aspects of stock market evolution. First, the forecasting problems are presented and analyse in order to establish the main problems and the potential solutions. Second, the valuation problems are tackled in order to observe different trends and directions of solving these issues. Third, the portfolio return forecasts are mandatory in order to establish the results of the titles/market evolutions. The methods used in this research reveal the importance of adopting some important econometric tools in order to test the robustness of different main theories of the stock market and some important practices used among investors. The scope of the research was to give a quid pro quo in order to confer potential solutions regarding problems, paradoxes and efficient information of the stock market. The empirical results reveal that besides the critical side of the theories this paper sets a basis for a new eclectic approach regarding the probabilities that a title achieves certain values within a reasonable time frame. The main conclusion of this article suggests’ that the current theories register some gaps regarding the adherence into stock markets’ realities.

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Predicting Stock Market Performance

Journal of Individual Differences ◽

10.1027/1614-0001/a000330 ◽

2020 ◽

pp. 1-10

Author(s):

Thomas Plieger ◽

Thomas Grünhage ◽

Éilish Duke ◽

Martin Reuter

Keyword(s):

Stock Market ◽

Risk Taking ◽

Life Stress ◽

Price Volatility ◽

Individual Characteristics ◽

Self Report ◽

Financial Behavior ◽

Market Simulation ◽

Stock Market Performance ◽

Risk Taking Behavior

Abstract. Gender and personality traits influence risk proneness in the context of financial decisions. However, most studies on this topic have relied on either self-report data or on artificial measures of financial risk-taking behavior. Our study aimed to identify relevant trading behaviors and personal characteristics related to trading success. N = 108 Caucasians took part in a three-week stock market simulation paradigm, in which they traded shares of eight fictional companies that differed in issue price, volatility, and outcome. Participants also completed questionnaires measuring personality, risk-taking behavior, and life stress. Our model showed that being male and scoring high on self-directedness led to more risky financial behavior, which in turn positively predicted success in the stock market simulation. The total model explained 39% of the variance in trading success, indicating a role for other factors in influencing trading behavior. Future studies should try to enrich our model to get a more accurate impression of the associations between individual characteristics and financially successful behavior in context of stock trading.

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