Corporate mergers, stockholder diversification, and changes in systematic risk

Sayan Chatterjee · Michael Lubatkin

166 citations0/0 files storedStrategic Management Journal

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Corporate Finance and Governance Financial Markets and Investment Strategies Merger and Competition Analysis

Abstract

Abstract Strategic management literature suggests a relationship between systematic risk and the relatedness of merging firms. This is tested for a sample of 120 large mergers by controlling for the systematic risk of the target firm, correcting for possible problems of heteroskedasticity, and estimating shifts in risk over daily as well as monthly time horizons. Finally, the influence of leverage is considered. The findings highlight a performance distinction between corporate diversification and stockholder diversification in instances of related and unrelated mergers.

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References

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2007Learning to internationalise: the pace and success of foreign acquisitions 2002A multidimensional examination of slack and its impact on innovation.1999Cross-border mergers and acquisitions 1999Toward a Strategic Theory of Risk Premium: Moving Beyond Capm 2013Good learners: How top management teams affect the success and frequency of acquisitions 2011The (mis)measurement of M&A performance—A systematic narrative literature review

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