Work

Gains to Bidder Firms Revisited: Domestic and Foreign Acquisitions in Canada

Year: 2000

Type: article

Abstract: We present large-sample evidence on the performance of domestic and U.S.(foreign) bidder firms acquiring Canadian targets. Domestic bidders earn significantly positive average announcement-period abnormal returns, while U.S. bidder returns are indistinguishable from zero. Measures of pre- and post-acquisition abnormal accounting performance are also consistent with a superior domestic bidder performance. Domestic bidder announcement returns are on average greatest for offers involving stock-payment and for the bidders with the smallest equity size relative to the target. Neither direct foreign investment controls, horizontal product-market relationships, nor acquisition propensities explain why domestic bidders outperform their U.S. competitors.

Source: Journal of Financial and Quantitative Analysis

DOI: 10.2307/2676236

Authors: B. Espen Eckbo, Karin S. Thorburn

Institutions: Dartmouth College, European Corporate Governance Institute, Centre for Economic Policy Research, Norwegian School of Economics

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3125329271

FWCI: 28.16

Cites: 36

Cited by: 359

Related to: 10