Browsing by Subject "Event Study"

Now showing 1 - 5 of 5

Open Access
The impacts of the Gulf War on the US defense industry
(2000) Cantenar, Ömer Faruk
In this study, the military intervention of the U.S to the Gulf Crises is taken as a major event and the impact of this event on the U.S defense stocks is examined by using event study methodology. The sample includes thirty-nine defense firms selected from the U.S Department of Defense top contractors list. The analysis of the abnormal returns on these defense stocks shows that the U.S. military intervention to the Gulf crises affects these stocks significantly and positively both in the short-term and in the long-term. The univariate analysis indicates that stock returns of defense firms are affected differently from this war depending on their defense dependency and market value. There exists a positive relationship between defense dependency and abnormal returns of the defense firms, controlling for the size of the firm.
Open Access
Market reaction to deaths of founders and non-founding executive family members in family firms
(2016-07) Arslan, Ezgi
This thesis empirically investigates how markets react to uncertainty regarding the separation of control and ownership in family firms. I examine the market reaction to deaths of founders or non-founding executive family members. Deaths of executive family members (including founders) create uncertainty regarding the future distribution of control rights and the sale of block-holds. My sample spans 88 death notices of founder or non-founding family members from 69 firms across 16 countries. Average abnormal return on the day of the death notice of executive family members is statistically significant and positive at 0.75 percent. The positive and significant market reaction to executive family member deaths indicates that the expected dilution in family control is perceived as positive news. Furthermore, cross-country market reaction to deaths of executive family members is more pronounced (but the difference proves insignificant) as the protection of shareholder rights decrease. Markets reaction to news about future dilution of family control in firms headquartered in countries, where minority shareholder rights are less protected, is more positive.
Open Access
Market reaction to private equity deal announcements
(2017-10) Bilgel, Süheyl
This thesis investigates whether and how target shareholders benefit in leveraged buyout deals in which the target is a public company and the acquirer is a private equity firm. We conduct an event study and run cross sectional regressions of cumulative abnormal returns (CARs) on various firm characteristics. Target CARs average 21.17% in the 3-day event window surrounding the announcement of leveraged buyout transactions. Regression results indicate that CARs decrease with target firm size.
Open Access
Mergers and acquisitions during financial crises
(2016-09) Yılmaz, Işıl Sevilay
This thesis investigates the effects of financial crises on mergers and acquisitions (M&A) activity. We investigate if M&A deals in crisis periods differ in terms of dollar volume and quantity of deals, target and bidder characteristics, cumulative abnormal returns (CAR) and deal premiums. First, we describe global M&A activity across 47 countries over the period 1992 to 2011. We investigate how value is generated and distributed in M&A deals around the world. We find that M&A activity (particularly in deals where control rights are sold) generates value. We also find that the magnitudes of bidder and target CARs in developed countries are higher than those in emerging-market countries. Second, we identify effects of financial crises based on a sample of 39 countries. We conclude that financial crisis in target country affects the value generated in M&A deals and how the generated value is distributed between target and bidder shareholders. Moreover, a typical crisis affects the value generated and the distribution of value differently in developed and emerging countries. In particular, crisis time M&A deals generate more value if the target is from a developed country. Finally, financial crises may affect the type of deals that are undertaken and/or affect the pricing of deals. We investigate if differences in deal characteristics account for differences in the value generated and distributed. We conclude that targets operating in countries, which experience crisis, enjoy higher CARs in the full sample even after accounting for the differences in deal specifics.
Open Access
Stock-market reactions to mergers of non-financial Turkish firms
(2010) Hekimoğlu, Mert Hakan
This study investigates stock-market reactions to mergers of non-financial Turkish firms. I conduct an event study to detect abnormal stock returns of Turkish target firms around merger announcements. In an efficient market, movements in stock prices (returns) reflect investors’ assessments of new information about the firm and its operating environs. Assuming market efficiency, event studies model “normal” returns. Abnormal returns are the difference between realized returns and normal returns. The sample consists of 125 mergers from July 1991 to July 2009. This study reveals that Turkish targets earn on average a cumulative abnormal return of 8.56% in the three-day window around merger announcements when control rights in target firms change hands. This study contributes to the merger literature by providing evidence that markets react positively to merger announcements of Turkish target firms. However, reaction of Turkish markets generates smaller returns than the reaction of US and European markets. Stock market’s reaction to merger announcements may differ from country to country as well as announcement date specification is problematic for Turkish firms which may be the reason for smaller returns in Turkish markets.