Abstract
We explore the impact of acquiring and acquired firms’ R&D expenditure on the market reaction to M&As. Using a sample of 9 739 Chinese M&A deals announced between 2009 and 2017, we find that acquired firms spending more on R&D expenditure react negatively to M&As, while acquiring firms with high R&D expenditure react positively to M&As. We further discuss the impact of R&D on market reactions when acquiring firms pay an offer premium, and we find that the premium leads acquired firms to react positively to M&As but results in negative market reactions to acquiring firms. Our results hold after we conduct robustness tests.
| Original language | English |
|---|---|
| Pages (from-to) | 75-88 |
| Number of pages | 14 |
| Journal | Investment Analysts Journal |
| Volume | 48 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 3 Apr 2019 |
| Externally published | Yes |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 9 Industry, Innovation, and Infrastructure
Keywords
- R&D investment
- mergers and acquisitions
- premium payment
- stock market reactions
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