Abnormal returns to rivals of acquisition targets: A test of the `acquisition probability hypothesis' ☆

By M. H. Song, R. Walkling. 2000

422 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/19a6a3d6625271f5699f7cef0ae0488f1332583d

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Alex Edmans
2. Tony W. Tong
3. Jie Cai
4. R. Walkling
5. M. H. Song
6. Klaus Gugler
7. Tomaso Duso
8. Itay Goldstein

In Economics and Econometrics

1. Tony W. Tong
2. Klaus Gugler
3. Tomaso Duso
4. Jie Cai
5. B. Yurtoglu
6. R. Walkling
7. M. H. Song
8. Kenneth Younge

Citations in the corpus

• A Signaling Theory of Acquisition Premiums: Evidence from IPO Targets (2012, background): “…the IPO firm obtained visibility by listing on a major stock exchange, either the New York Stock Exchange (NYSE) or NASDAQ (major exchange) (e.g., Rao, Davis, & Ward, 2000) as well as the level of acquisition activity in the IPO firm’s industry (industry M&A volume) (e.g., Song & Walkling, 2000).”
• Shareholder-Initiated Class Action Lawsuits: Shareholder Wealth Effects and Industry Spillovers (2009, background): “Song and Walkling (2000) investigate industry spillover in the context of acquisitions.”
• Anticipation, Acquisitions and Bidder Returns: Industry Shocks and the Transfer of Information Across Rivals (2011, positive): “Song and Walkling (2000) find that rivals of target firms experience abnormal returns to the extent that they are also likely to be targets. returns bidders experience around the time of the initial industry bid into the overall wealth effect of their bidding, we find that bidders of public targets…”
• The Market for Mergers and the Boundaries of the Firm (2004, background): “Song and Walkling (2000) find when an acquisition is announced, the target’s rival firms exhibit abnormal stock returns.”
• How Do Mergers Create Value? A Comparison of Taxes, Market Power, and Efficiency Improvements as Explanations for Synergies (2009, neutral): “Song and Walkling (2000) also use Value Line industry classifications.”
• Acquisition Announcements and Stock Market Valuations of Acquiring Firms’ Rivals: A Test of the Growth Probability Hypothesis in China (2011, neutral): “Second, the acquisition probability hypothesis suggests that horizontal M&As increase the probability that rivals of target firms will become targets of future acquisition activities (Wallace, Song, and Walkling, 2000).”
• The Performance Implications of Participating in an Acquisition Wave: Early Mover Advantages, Bandwagon Effects, and The Moderating Influence of Industry Characteristics and Acquirer Tactics (2008, background): “Second, they may experience greater acquisition costs since the bandwagon pressures lead them to collectively bid up the prices of the remaining targets (Song & Walkling, 2000).”
• Is European M&A regulation protectionist? (2007, neutral): “Song and Walkling (2000) use the Value Line industrial classification.”
• Negotiations Under the Threat of an Auction (2010, neutral): “In our independent private-value setting, thanks to Vickrey’s (1961) seminal contribution, secondprice auctions with reserve prices are known to be revenue equivalent to English auctions with reserve prices (see Matthews, 1995; Milgrom, 2004).”
• How Anticipated Employee Mobility Affects Acquisition Likelihood: Evidence from a Natural Experiment (2015, methodology): “Mgmt. J. (2014) DOI: 10.1002/smj study, given our focus on acquisition likelihood and our research design requiring the inclusion of both acquisition events and “nonevents” in the sample (Field and Karpoff, 2002; Schildt and Laamanen, 2006; Song and Walkling, 2000).”
• The Real Effects of Financial Markets: The Impact of Prices on Takeovers (2012, background): “In that, our paper is related to Song and Walkling (2000), who find an increase in firms’ stock prices following the acquisition of their rivals and attribute this to the increased expectation that they will be taken over themselves.”
• Internal and external governance mechanisms: their impact on the performance of large UK public companies. (2002, background): “Vafeas (1999) finds that board subcommittee structure and quality provide insights into those responsible for undertaking the monitoring roles within companies. Wild (1994) shows that the market reacted more favourably to earnings reports after an audit committee had been established.”
• The Limitations of Industry Concentration Measures Constructed with Compustat Data: Implications for Finance Research (2009, neutral): “…(Hou and Robinson 2006), informed trading (Tookes 2008), idiosyncratic stock return volatility (Gaspar and Massa 2006), mergers and acquisitions (Song and Walkling 2000; Fee and Thomas 2004; Shahrur 2005), corporate governance (DeFond and Park 1999; Engel, Hayes, and Wang 2003; Rennie 2006;…”