Work detail

Corporate Acquisitions and Expected Stock Returns: A Meta-Analysis

Author: Thibault Parreau
Year: 2019 - summer
Leaders: prof. PhDr. Tomáš Havránek Ph.D.
Work type: CSF - Corporate Strategy and Finance
Language: English
Pages: 84
Awards and prizes:
Abstract: This thesis aims at investigating the puzzling relationship between corporate acquisitions and expected stock returns by reviewing numerous
studies on this topic through the use of state of the art meta-analysis
tools. Such an analysis is required because many papers examined this
relationship but their results varied. We therefore collected 421 estimates
from 20 papers and led multiple regressions to test for the presence of
publication bias. Throughout this analysis we indeed found evidence
supporting the existence of publication bias. Furthermore, we decided
to apply Bayesian Model Averaging to reduce the model uncertainty and
find out why our abnormal returns estimates greatly vary across studies. Our results suggest that one of the most important drivers are the
standard-error terms. This subsequently proves that publication bias is
the most responsible for the heterogeneity amongst our estimates. Our
analysis fails to demonstrate any positive effects from M&A activity on
a firm post-acquisition performance. We suggest that other motives are
under-represented in the underlying theory that aims to assess M&A




Patria Finance
Česká Spořitelna