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The Effect of Merger and Aquisition on Firm Performance after 2008 Global Financial Crisis : Empirical Evidence from United Kingdom
| Content Provider | Semantic Scholar |
|---|---|
| Author | Konak, Fatih |
| Copyright Year | 2017 |
| Abstract | In historical perspective, companies that fallow any development and change can be more successful in long run than any firms which are the conservative resistance to change. In this concern, the growth of companies' in mergers and acquisitions way can be seen a crucial expanding technique and opportunity. These techniques can be defined as follow two or more firms come together under the roof of one company which have independent legal structure and combined resource of these firms. In the perspective of the prominent finance theory namely Efficient Markets Hypothesis, the main aim of the research is to identify the effect of 485 merger and acquisition on market performance of English firms that are listed in FTSE 100 Index after 2008 Financial Crisis by employing event study methodology. According to event study approach that used to test semi-strong efficiency of markets in general, we determined [-20, -250] 'Estimation window and [-20, +20] 'Event window' so as to avoid any factors that can be effect market price of companies. In addition, Average Abnormal ReturnsAAR and Cumulative Average Abnormal Returns CAAR are found to examine the possible impact of M&A in different days and event windows respectively. Although the outcomes of research demonstrate the significant negative and positive AAR values, any trend has not been figured out. However, in the context of CAAR, we observed overwhelmingly negative cumulative findings. Under the acceptance of limitations of methodology and sample, it can be claimed that FTSE 100 is not efficient in semi-strong form. It may also be noted that value creating impact of mergers and acquisitions is not found. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://iosrjournals.org/iosr-jbm/papers/Vol19-issue10/Version-3/D1910032834.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
