Abstract

Event-study methodology uses relatively short time frames to assess stock market reactions to discrete events, demonstrated by abnormal stock returns—or the difference between expected and actual stock prices (Cording et al. 2010; Haleblian et al. 2009). Initially developed in the field of financial economics in the late 1960s (Fama et al. 1969), event studies have become a ubiquitous method for measuring the performance effects of mergers and acquisitions (hereafter “M&As” or “acquisitions”). Indeed, while numerous methods have been used to assess the performance effects of acquisitions, reviews and meta-analyses have shown that event studies are the most dominant (Cording et al. 2010; Goranova et al. 2010; Haleblian et al. 2009; King et al. 2004).