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Corporate Acquisitions and Firm-level Uncertainty: Domestic versus Cross-Border Deals

Bai, Y., Girma, S. and Riaño, A. ORCID: 0000-0002-8824-4055 (2020). Corporate Acquisitions and Firm-level Uncertainty: Domestic versus Cross-Border Deals (20/09). London, UK: Department of Economics, City, University of London.

Abstract

This paper studies the impact of corporate acquisitions on the uncertainty faced by acquiring firms. We use data for UK public companies from 2004 to 2017 and employ a matching estimator combined with difference-in-differences to control for the endogenous selection of firms into acquiring status. Acquisitions exert a large and persistent effect on the volatility of stock returns of acquirers and is characterized by a pecking order: domestic takeovers lead to a reduction in the uncertainty faced by the acquirer, while cross-border acquisitions|particularly those involving target firms in emerging markets|engender a positive response in acquirers' volatility.

Publication Type: Monograph (Discussion Paper)
Additional Information: Copyright 2020, the authors.
Publisher Keywords: Mergers and Acquisitions; Uncertainty; Volatility; Globalization; Stock Returns; UK
Subjects: H Social Sciences > HG Finance
J Political Science > JZ International relations
Departments: School of Arts & Social Sciences > Economics
School of Arts & Social Sciences > Economics > Discussion Paper Series
Date Deposited: 12 Mar 2020 17:29
URI: https://openaccess.city.ac.uk/id/eprint/23921
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