Do Takeover Targets Underperform? Evidence from Operating and Stock Returns

摘要: Financial economists seem to believe that takeovers are partly motivated by the desire improve poorly performing firms. However, prior empirical evidence in support of this inefficient management hypothesis is rather weak. We provide a detailed re-examination large scale study. find little target firms were before acquisition, using either operating or stock returns. This result holds both for sample as whole and subsamples more likely be disciplinary. conclude conventional view targets perform not supported data.