Growth strategies and value creation : what works best for stock exchanges?

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Title: Growth strategies and value creation : what works best for stock exchanges?
ISBN: 978-952-462-570-8
Author: Hasan, Iftekhar ; Schmiedel, Heiko ; Song, Liang
Organization: Bank of Finland
Series: Bank of Finland Research Discussion Papers
ISSN: 1456-6184
Series year: 2010
Series number: 2/2010
Year of publication: 2010
Publication date: 5.1.2010
Published in: Published in Financial Review, Volume 47, Issue 3, August 2012: 469-499
DOI: 10.1111/j.1540-6288.2012.00337.x
Pages: 48 s.
Keywords: mittarit; oppiminen; pörssit; fuusiot; vaikutukset; hinnat; osakemarkkinat; osakkeet; integraatio; kansainvälinen; tuotot; liittoutumat; IPO; arvostukset
Abstract: In recent years, demutualized stock exchanges have increasingly engaged in M&A and alliance activities. To shed light on this topic, we investigate short-run share price responses to the formation of 110 stock exchange M&As and alliances in the period 2000 2008. Our ?ndings show that the average stock-price responses to a stock-exchange M&A or alliance is positive. Stock exchange M&As create more value than alliances. For alliances, joint ventures generate more value than non-equity alliances. More value is created when the integration is horizontal and cross-border than when it is vertical and domestic. Evidence is also found for learning-by-doing effects in stock exchange integration activities. Finally, we find that the better the shareholder protection, accounting standards and degree of capital market development in the partnering exchange s country, the higher the merger and alliance premium. These patterns also obtain when we examine long-run performance measures such as the three-year buy-and-hold abnormal return, change in ROA (ROE), change in liquidity, and change in market capitalization of IPO between years t-2 and t+2.
Note: Ilmestynyt myös ECP WP 1201 v. 2010 sekä FINANCIAL REVIEW 2012 ; 34 ; 7.

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