Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5100306 | Journal of Empirical Finance | 2017 | 18 Pages |
Abstract
Secondary market stock returns of newly public firms with high levels of institutional investment exceed returns of firms with low institutional investment (Field and Lowry, 2009). We find that a material portion of this performance differential is attributable to institutional investment in firms that participate in mergers and acquisitions after their initial public offerings (IPOs). Specifically, institutions not only tend to avoid underperforming firms, on average, but also invest heavily in IPO firms that subsequently become M&A participants, especially well-performing bidders and targets. Superior returns among firms with high institutional ownership suggests the ability of institutional investors to identify and actively monitor newly public M&A participants.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Christopher W. Anderson, Jian Huang,