The decision to acquire listed vs. Unlisted firmsDeterminants and value effects in the spanish stock market

  1. José E. Farinós 1
  2. Begoña Herrero 1
  3. Miguel A. Latorre 2
  1. 1 Universitat de València
    info

    Universitat de València

    Valencia, España

    ROR https://ror.org/043nxc105

  2. 2 Universidad Católica de Valencia San Vicente Mártir
    info

    Universidad Católica de Valencia San Vicente Mártir

    Valencia, España

    ROR https://ror.org/03d7a9c68

Revue:
Revista de economía aplicada

ISSN: 1133-455X

Année de publication: 2017

Volumen: 25

Número: 73

Pages: 55-94

Type: Article

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D'autres publications dans: Revista de economía aplicada

Résumé

We examine the determinants of the decision to acquire a listed vs. an unlisted firm and extend the previous evidence of value creation after controlling for endogeneity due to self-selection bias. We also control for market valuation conditions, finding that results are conditional to them. On the one hand, our results show that investors see unlisted firm acquisitions as a value creation transaction in a bull market period, whereas we find value destruction in the acquisition of listed firms. During the bear market period we do not find value creation in any case. On the other hand, our results suggest that managerial opportunism is a determinant in the acquisition of listed firms, either in bull or bear market periods. However, under information asymmetry, acquirers change their preferences depending on the market conditions.

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We also thank the Cátedra Finanzas Internacionales-Banco Santander of the University of Valencia for their financial support.

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