Original scientific paper
https://doi.org/10.1080/1331677X.2021.1997621
Shareholders’ indifference… short-term market reaction to firms’ first and subsequent acquisitions: evidence from China
Dmytro Osiichuk
Paweł Wnuczak
Abstract
Having analysed the history of acquisitions by public Chinese
companies over the period of 1996–2020, we document no persistent statistically significant short-term market reaction upon
deal completion. Short-term cumulative abnormal returns are
non-different from zero regardless of whether the acquisition is
the first or one of many on acquirers’ record, whether it is domestic or cross-border or whether it is vertical or horizontal as well as
regardless of industry and declared purpose of acquisition. In the
overwhelming majority of cases, acquirers’ prior acquisition
experience plays no role in shaping short-term post-acquisition
returns. Lower returns are associated with serial acquirers especially if the series of acquisitions occurs within the same industry.
Likewise, significantly lower cumulative returns are observed if
the acquiree is a state-owned entity. Overall, the markets appear
to attach no abnormal returns to firms’ inorganic growth regardless of its span across geographies, industries and time.
Keywords
Acquisitions; cross-border; emerging markets
Hrčak ID:
302609
URI
Publication date:
31.3.2023.
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