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Korean Journal of Financial Studies 2010;39(2):191-223.
Published online June 30, 2010.
The Effects of Mergers and Acquisitions on Acquiring Firms` Performance in KOSDAQ Market
Hyo Suk Kang, Jae Woong Suh
코스닥기업의 인수합병이 인수기업의 경영성과에 미치는 영향
강효석, 서재웅
Abstract
This study investigates the announcement effect and the post-merger operating performance of acquiring firms in Korea for a large sample of M&As conducted in KOSDAQ market since the financial crisis period of late 1990s. Excluding 108 backdoor listings out of 333 total M&As by non-financial companies between January 2000 and June 2008, our final sample consists of 225 ordinary M&As, which includes ``acquisition of business`` and ``acquisition of stock``, as well as ``merger.`` The empirical findings show that acquiring firms not only earn the positive announcement stock returns, but also significantly outperform the benchmark in terms of long-run operating performance. The acquirers` industry- adjusted operating returns on assets improve on average of 6.6% over the two-year periods before and after the acquisition year, implying the positive economic benefits of M&As. Furthermore, we found the change of profit margin rather than that of total asset turnover contributes more to the improvement of long-run operating performance, especially in case of non-affiliated mergers. It is interpreted that KOSDAQ companies typically less diversified attempt non-affiliated M&As when undergoing the profit margin decline, ultimately achieving the recovery of profit margin in the long run.
Key Words: 공시효과,비관련합병,인수합병,장기영업성과,코스닥,Announcement Effect,KOSDAQ,Long-run Operating Performance,M&, A,Non-affiliated Mergers


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