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Research on Persistence of Frequent Acquirers’ Returns and Its Affected Factors

Received: 30 October 2017     Accepted: 13 November 2017     Published: 24 November 2017
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Abstract

Persistence of acquirer returns is one of the most important considerations when corporations making acquisitions. Therefore, the paper aims to analyze the sustainability of acquisition performance and its affected factors. The first part focuses on analyzing persistence of frequent and occasional acquirers’ returns. Regression analysis and mean value test are adopted in this section to verify whether the acquisition performance is persistent in the subsamples mentioned above. It proved that the persistence of frequent acquirers’ return is more significant than occasional acquirers by comparing the experimental results of two subsamples. The other part of the paper aims to find out the main influence factors on persistence of frequent acquirer returns. Specifically, Firm characteristics and management structure impact the sustainability of acquisition performance to some extent. But the explanation degree is limited according to OLS regression result. In this case, fixed effect model is introduced into the paper. In addition, LR test proves the fixed effect model is superior to the mixed effect model. It turns out that besides firm characteristics and management structure, the persistence of acquirer returns is determined by some unobservable factors of the specific firm, such as acquisition skill, capability of valuating and integrating the target asset. This conclusion explains the fact that the persistence of frequent acquirers’ return is more significant than the occasional acquirers mentioned above.

Published in International Journal of Business and Economics Research (Volume 6, Issue 5)
DOI 10.11648/j.ijber.20170605.17
Page(s) 134-138
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Persistence of Acquirer Returns, Frequent Acquirers, Occasional Acquirers, Fixed Effect Model

References
[1] Andrey Golubov, Alfred Yawson. Extraordinary acquirers [J]. Journal of Financial Economics, 2015, 116 (2): 314-330.
[2] Moeller, Sara B., Frederik P. Schlingemann, René M. Stulz. Firm size and the gains from acquisitions [J]. Journal of Financial Economics, 2004, 73, 201-228.
[3] Andrade, Gregor, Mark L. Mitchell, Erik Stafford. New evidence and perspectives on mergers [J]. Journal of Economic Perspectives, 2001, 15, 103-120.
[4] Naseem Al Rahahleh, Peihwang Philip Wei. The performance of frequent acquirers: Evidence from emerging markets [J]. Global Finance Journal, 2012, 23 (1): 16-33.
[5] Li Wenyao, Xu xusong. Empirical Analysis of enterprises’ capital structure based on panel data [J]. Journal of Wuhan University, 2004, 57 (04): 432-436.
[6] Guan Jian, Cai Huaijun, Guo Defang. An empirical study on stakeholder relationships affecting the sustainability of financial performance of the company [J]. Financial Theory and Practice, 2015, 195 (36): 72-77.
[7] Pan Ying, Zhang Xiaoming, Shen Weixiang. An empirical study on the relationship between shareholding structure and M&A performance of listed companies in China [J]. Productivity Research, 2010, 11: 92-94.
[8] zhang Jinxin. Resource matching: strategic analysis on the matching of acquirer and target [D]. Beijing Jiaotong university. 2005.
[9] zhou Xiaochun, Li Shanmin. Research on the influence factors of M&A value creation [J]. Management world, 2008 (5): 134-143.
[10] Zeng Ying. Asset injection: payment means and market reaction [J]. Securities Market Herald, 2007 (10): 29-33.
[11] He Ren. An empirical study on the impact of M&A on long-term shareholder value of acquisitions- taking high-technology listed company as an example. [D], Harbin Institute of Technology, 2014.
[12] Xie Linghong, Liu Shangu, Qiu Wanhua. The influence of overconfidence behavior of learning managers on continuous M&A performance [J]. Management review, 2011, 23 (7): 149-154.
[13] Ye Zhangli, The empirical study on M&A performance of listed companies in China [J]. Statistics and Decision, 2013 (7): 165-168.
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  • APA Style

    Jinbu Zhai, Su Guo, Yang Guo. (2017). Research on Persistence of Frequent Acquirers’ Returns and Its Affected Factors. International Journal of Business and Economics Research, 6(5), 134-138. https://doi.org/10.11648/j.ijber.20170605.17

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    ACS Style

    Jinbu Zhai; Su Guo; Yang Guo. Research on Persistence of Frequent Acquirers’ Returns and Its Affected Factors. Int. J. Bus. Econ. Res. 2017, 6(5), 134-138. doi: 10.11648/j.ijber.20170605.17

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    AMA Style

    Jinbu Zhai, Su Guo, Yang Guo. Research on Persistence of Frequent Acquirers’ Returns and Its Affected Factors. Int J Bus Econ Res. 2017;6(5):134-138. doi: 10.11648/j.ijber.20170605.17

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  • @article{10.11648/j.ijber.20170605.17,
      author = {Jinbu Zhai and Su Guo and Yang Guo},
      title = {Research on Persistence of Frequent Acquirers’ Returns and Its Affected Factors},
      journal = {International Journal of Business and Economics Research},
      volume = {6},
      number = {5},
      pages = {134-138},
      doi = {10.11648/j.ijber.20170605.17},
      url = {https://doi.org/10.11648/j.ijber.20170605.17},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20170605.17},
      abstract = {Persistence of acquirer returns is one of the most important considerations when corporations making acquisitions. Therefore, the paper aims to analyze the sustainability of acquisition performance and its affected factors. The first part focuses on analyzing persistence of frequent and occasional acquirers’ returns. Regression analysis and mean value test are adopted in this section to verify whether the acquisition performance is persistent in the subsamples mentioned above. It proved that the persistence of frequent acquirers’ return is more significant than occasional acquirers by comparing the experimental results of two subsamples. The other part of the paper aims to find out the main influence factors on persistence of frequent acquirer returns. Specifically, Firm characteristics and management structure impact the sustainability of acquisition performance to some extent. But the explanation degree is limited according to OLS regression result. In this case, fixed effect model is introduced into the paper. In addition, LR test proves the fixed effect model is superior to the mixed effect model. It turns out that besides firm characteristics and management structure, the persistence of acquirer returns is determined by some unobservable factors of the specific firm, such as acquisition skill, capability of valuating and integrating the target asset. This conclusion explains the fact that the persistence of frequent acquirers’ return is more significant than the occasional acquirers mentioned above.},
     year = {2017}
    }
    

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    AU  - Jinbu Zhai
    AU  - Su Guo
    AU  - Yang Guo
    Y1  - 2017/11/24
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    T2  - International Journal of Business and Economics Research
    JF  - International Journal of Business and Economics Research
    JO  - International Journal of Business and Economics Research
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    PB  - Science Publishing Group
    SN  - 2328-756X
    UR  - https://doi.org/10.11648/j.ijber.20170605.17
    AB  - Persistence of acquirer returns is one of the most important considerations when corporations making acquisitions. Therefore, the paper aims to analyze the sustainability of acquisition performance and its affected factors. The first part focuses on analyzing persistence of frequent and occasional acquirers’ returns. Regression analysis and mean value test are adopted in this section to verify whether the acquisition performance is persistent in the subsamples mentioned above. It proved that the persistence of frequent acquirers’ return is more significant than occasional acquirers by comparing the experimental results of two subsamples. The other part of the paper aims to find out the main influence factors on persistence of frequent acquirer returns. Specifically, Firm characteristics and management structure impact the sustainability of acquisition performance to some extent. But the explanation degree is limited according to OLS regression result. In this case, fixed effect model is introduced into the paper. In addition, LR test proves the fixed effect model is superior to the mixed effect model. It turns out that besides firm characteristics and management structure, the persistence of acquirer returns is determined by some unobservable factors of the specific firm, such as acquisition skill, capability of valuating and integrating the target asset. This conclusion explains the fact that the persistence of frequent acquirers’ return is more significant than the occasional acquirers mentioned above.
    VL  - 6
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Author Information
  • Department of Finance and Taxation, Central University of Finance and Economics, Beijing, China

  • Department of Finance and Taxation, Central University of Finance and Economics, Beijing, China

  • Department of Mathematics and Statistics, Central University of Finance and Economics, Beijing, China

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