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| Author: | Clougherty, J. A. Duso, T. |
| Title: | The impact of horizontal mergers on rivals: gains to being left outside a merger |
| Journal: | Journal of Management Studies
2009 : DEC, VOL. 46:8 p. 1365-1395 |
| Index terms: | consolidation mergers management mathematical models competition financial markets |
| Language: | eng |
| Abstract: | In this article, it is argued that it is profitable to be a non-merging competitor to a large horizontal merger. Using a sample of mergers with the expert identification of relevant rivals and the event-study methodology, competitors are found generally get positive abnormal returns at the merger announcement date. It is also found that the stock reaction of rivals to merger is not sensitive to merger waves: "future acquisition probability" doesn't cause the positive abnormal returns of rivals. It is found the positive abnormal returns of rivals to be robust when considering heterogeneity in merger and rival characteristics. |
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