Does Investor Misvaluation Drive the Takeover Market

By Ming Dong, David A. Hirshleifer, Scott Richarson, Siew Hong Teoh. 2003

1,064 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/e216bc5a00c44b6bf94c393ceebd19497c610652

How researchers see this paper

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

In Accounting

In Finance

In Strategy and Management

Citations in the corpus

How have M&As changed? Evidence from the sixth merger wave (2012, neutral): “2 Rhodes-Kropf, Robinson, and Viswanathan (2005) and Dong et al. (2006) find that acquirers were more overvalued than targets in the 1980s and 1990s.”
Overpriced Shares, Ill-Advised Acquisitions, and Goodwill Impairment (2011, neutral): “A monotonic increase in acquisition intensity holds also for the subsample of bidder firms, corroborating earlier findings by Dong et al. (2006).”
Ownership Structure and Financial Constraints: Evidence from a Structural Estimation (2011, positive): “Following Dong et al. (2006), we calculate the annualized cost of equity based on the Capital Asset Pricing Model (CAPM) using the market risk premium calculated as the average annual premium of the Center for Research in Security Prices (CRSP) value-weighted index over the risk-free rate over the…”
A Signaling Theory of Acquisition Premiums: Evidence from IPO Targets (2012, methodology): “Second, we controlled for IPO firm Tobin’s Q, which captures a firm’s marketbased performance as well as the growth opportunities an acquirer can access through acquisition of the firm (e.g., Dong et al., 2006).”
Eat or Be Eaten: A Theory of Mergers and Firm Size (2009, background): “8 For empirical evidence supporting this theory, see Ang and Cheng (2006), Dong et al. (2006), and Rhodes-Kropf, Robinson, and Viswanathan (2005). However, Harford (2005) finds that industry shocks and sufficient liquidity in the capital markets are more important in causing merger waves than market”
Management Forecast Quality and Capital Investment Decisions (2014, neutral): “Tobin’s Q, ROA, Growth and Firm Size are associated with a firm’s growth opportunities and the availability of financing (Moeller et al. 2004; Dong et al. 2006).”
The Real Effects of Financial Markets: The Impact of Prices on Takeovers (2012, background): “In particular, Dong et al. (2006) use a firm’s multiple as an indicator for mispricing and link it to takeover activity.”
Firm Life Cycle, Corporate Risk Taking, and Investor Sentiment (2017, neutral): “…Recent work in finance has studied the impact of such sentiment on corporate actions, such as equity issues (Baker and Wurgler, 2002), dividend payouts (Baker and Wurgler, 2004; Li and Lie, 2006), investment (Gilchrist et al. 2005; Polk and Sapienza, 2009) and acquisitions (Dong et al. 2006).”
The effect of reference point prices on mergers and acquisitions (2012, background): “(2005) and Dong et al. (2006), among others, confirm that targets do indeed have higher book-to-market ratios than bidders.”
Behavioural Finance: A Review and Synthesis (2007, neutral): “The key implication of the theory, that firms with high market valuations acquire those with low market valuations is borne out by Rhodes-Kropf et al. (2005) and Dong et al. (2006).”