Event-study methodology in the context of M&As

A reorientation

Authored by: Joseph S. Harrison , Mario Schijven

The Routledge Companion to Mergers and Acquisitions

Print publication date:  July  2015
Online publication date:  June  2015

Print ISBN: 9780415704663
eBook ISBN: 9780203761885
Adobe ISBN: 9781134497652


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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).

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