Large shareholders and bidder announcement returns : evidence from Western Europe and East Asia
Date
2011
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ORCID
Type
Degree Level
Masters
Abstract
We investigate whether multiple large shareholders (MLS) play an internal corporate governance role in mitigating agency problems between the controlling shareholder and minority shareholders in a cross-country sample of public firms. We draw our conclusion by examining the market reaction (in terms of bidder announcement period abnormal returns) to acquisition announcements made by firms with and without MLS in their ownership structure. Using an international sample of acquisition announcements made by firms with at least one large shareholder from 10 Western European and 5 East Asian countries between 1996 and 2000, we find the presence of MLS, their voting rights, relative voting power, the number of blockholders and the relative voting power of these blockholders have a positive and significant impact on bidder announcement period abnormal returns. We also find that the legal institutions such as disclosure requirement, investor protection, common-law legal origin and anti-self-dealing have positive effects on bidder announcement period abnormal returns.
Description
Keywords
corporate governance, cumulative abnormal returns, mergers and acquisitions, investor protection, large shareholders, agency costs
Citation
Degree
Master of Science (M.Sc.)
Department
Finance and Management Science
Program
Finance and Management Science