Asymmetric Cost Behavior and Acquirer Returns: Evidence From U.s. Mergers

dc.contributor.author Uğurlu, Mine
dc.contributor.author Öztürk Danışman, Gamze
dc.contributor.author Öztürk Danışman, Gamze
dc.contributor.author Vural Yavaş, Çiğdem
dc.contributor.author Bilyay-Erdoğan, Seda
dc.contributor.author Vural-Yavaş, Çiğdem
dc.contributor.other International Trade and Finance
dc.date.accessioned 2020-12-14T17:06:34Z
dc.date.available 2020-12-14T17:06:34Z
dc.date.issued 2019
dc.description.abstract This paper investigates the asymmetric behavior of the selling, general and administrative (SG&A) costs of acquirers, and reveals its effects on mergers & acquisitions (M&A) performance in a one-year event window. It is based on a sample of 6888 M&As completed in the U.S. during the 2003-2015 period and employs panel data regressions. The results show that 73% of the acquirers display asymmetric cost behavior. A significant negative relation is found between cost stickiness and acquirers' abnormal returns following the merger announcement. Competition in the market for corporate control is positively related with acquirer returns but exacerbates the negative effects of cost-stickiness on abnormal returns of acquirers. The acquirers' risk of default is significantly negatively related to the abnormal returns they generate. This adverse effect of default risk on returns is stronger for acquirers with anti-sticky costs. Acquirer risk offsets the positive effects of competition on returns. Acquirers with sticky costs have lower abnormal returns than those with anti-sticky costs in a one-year window. The present study contributes to the literature by revealing the asymmetric cost behavior of acquirers involved in merger activity during the last decade, and provides evidence for an alternative explanation for the lower abnormal returns of the acquiring firms. en_US
dc.identifier.citationcount 1
dc.identifier.doi 10.21121/eab.536640 en_US
dc.identifier.endpage 339 en_US
dc.identifier.issn 1303-099X en_US
dc.identifier.issn 1303-099X
dc.identifier.issue 3 en_US
dc.identifier.startpage 323 en_US
dc.identifier.trdizinid 388231 en_US
dc.identifier.uri https://hdl.handle.net/20.500.12469/3549
dc.identifier.uri https://doi.org/10.21121/eab.536640
dc.identifier.uri https://search.trdizin.gov.tr/yayin/detay/388231
dc.identifier.volume 19 en_US
dc.identifier.wos WOS:000476769100002 en_US
dc.institutionauthor Bilyay-Erdoğan, Seda en_US
dc.institutionauthor Vural-Yavaş, Çiğdem en_US
dc.language.iso en en_US
dc.publisher Ege Univ en_US
dc.relation.journal Ege Academic Review en_US
dc.relation.publicationcategory Makale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı en_US
dc.rights info:eu-repo/semantics/openAccess en_US
dc.subject Cost asymmetry en_US
dc.subject Merger performance en_US
dc.subject Acquirer returns en_US
dc.subject Cost anti-stickiness en_US
dc.subject Sticky-costs en_US
dc.title Asymmetric Cost Behavior and Acquirer Returns: Evidence From U.s. Mergers en_US
dc.type Article en_US
dc.wos.citedbyCount 2
dspace.entity.type Publication
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