tailieunhanh - Merger and acquisitions of IPO firms in Taiwan

There have been great efforts in the finance literature to enhance the understanding of companies experiencing substantial growth. IPOs and mergers and acquisitions (M&As) are very important restructure options for firms growing with complexity arises from internally and externally. Solution-driven strategies should be desirable for firms go public, especially in emerging economics regime, such as Taiwan. In this study, we examine the key predictions, short-run and long-term performance of merger and acquisition activities of Taiwan IPO firms. Implications on investigating the effects of the long-term performance for newly listed firms that become subsequent bidder draw attention for investors seeking global investment strategy. | Journal of Applied Finance Banking vol. 5 no. 3 2015 145-157 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2015 Merger and Acquisitions of IPO firms in Taiwan Jean Yu1 and Shiow-Ying Wen2 Abstract There have been great efforts in the finance literature to enhance the understanding of companies experiencing substantial growth. IPOs and mergers and acquisitions M As are very important restructure options for firms growing with complexity arises from internally and externally. Solution-driven strategies should be desirable for firms go public especially in emerging economics regime such as Taiwan. In this study we examine the key predictions short-run and long-term performance of merger and acquisition activities of Taiwan IPO firms. Implications on investigating the effects of the long-term performance for newly listed firms that become subsequent bidder draw attention for investors seeking global investment strategy. The results show that the performance of IPO acquirers is significantly different from IPO non-acquirers measured in abnormal returns and cumulative abnormal returns. Moreover from the cross-sectional regression analysis IPO acquirers outperform non-acquires. After controlling for the effect of different deal and firm characteristics the multiple regression results confirm the significant negative size effect leaving age proceeds market to book ratio insignificant. Overall our results regarding the takeover activity of IPOs help explain IPO underperformance. JEL classification numbers G34 G14 G15 Keywords Initial Public Offerings IPOs Merger and Acquisition M As 1 Introduction There have been great efforts in the finance literature to enhance our understanding of companies experiencing substantial growth. Penrole 1959 emphasizes the process and limits of firm growth and categorizes three potential limits to growth. These limits include managerial liability conditions within the firm product or factor markets conditions outside the firm .