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Wealth of Merger and Acquisition on Acquiring Firms in Brazil

Author

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  • Jianyu Ma

    (School of Business, Robert Morris University, Moon Township, USA)

  • Mingzhai Geng

    (Center for Collaborative Innovation Research on New Urbanization and CPEZ Construction, Henan University, China)

  • Yun Chu

    (School of Business, Robert Morris University, Moon Township, USA)

  • Jason C. H. Chen

    (School of Business Administration, Gonzaga University, Spokane, USA)

Abstract

In this article, the authors examine the distribution of the stock returns for the acquiring firm and the corresponding market index. They find that significant non-normal distributions exist in a large number of acquiring firms. The authors use two robust regressions to examine the reliability of the standard OLS market models and find that no significant abnormal gain or loss in the selected windows, when all sample deals are included for analysis. However, positive abnormal returns appear in almost all selected windows when analysing deals in financial service industry, and negative abnormal returns appear in almost all selected windows when analysing deals in non-financial industries. Selection of the model and formation of the sample affect the results.

Suggested Citation

  • Jianyu Ma & Mingzhai Geng & Yun Chu & Jason C. H. Chen, 2018. "Wealth of Merger and Acquisition on Acquiring Firms in Brazil," International Journal of Information Systems and Social Change (IJISSC), IGI Global, vol. 9(3), pages 70-84, July.
    • Handle: RePEc:igg:jissc0:v:9:y:2018:i:3:p:70-84
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