Salaber, Julie and Rao-Nicholson, Rekha 2018. Cross-border arbitrage and acquirers’ returns in the Eurozone crisis. Journal of Economics and Business. 95, pp. 87-102. https://doi.org/10.1016/j.jeconbus.2017.05.001
| Title | Cross-border arbitrage and acquirers’ returns in the Eurozone crisis |
|---|---|
| Type | Journal article |
| Authors | Salaber, Julie and Rao-Nicholson, Rekha |
| Abstract | Using a sample of 1,263 European acquisitions over 2004–2012, we show that the performance of cross-border acquisitions is significantly affected by the Eurozone and the euro debt crisis. First, due to financial market integration and the elimination of exchange rate risk, intra-Eurozone acquisitions do not earn any abnormal returns for bidders. Second, as a result of the euro debt crisis and the temporary misvaluation among European countries, acquisitions earn positive abnormal returns only for non-Eurozone companies acquiring Eurozone targets. These abnormal returns are driven by the depreciation of the euro and the use of low-cost capital available to overvalued acquirers. |
| Journal | Journal of Economics and Business |
| Journal citation | 95, pp. 87-102 |
| ISSN | 0148-6195 |
| Year | 2018 |
| Publisher | Elsevier |
| Accepted author manuscript | |
| Digital Object Identifier (DOI) | https://doi.org/10.1016/j.jeconbus.2017.05.001 |
| Publication dates | |
| Published in print | 2018 |
| Published online | 04 Jun 2017 |
| Published | 04 Jun 2017 |