TY  - JOUR
TI  - Asymmetric Cost Behavior and Acquirer Returns: Evidence from U.S. Mergers
AB  - This paper investigates the asymmetric behaviorof the selling, general and administrative (SG&A)costs of acquirers, and reveals its effects on mergers& acquisitions (M&A) performance in a one-yearevent window. It is based on a sample of 6888 M&Ascompleted in the U.S. during the 2003-2015 periodand employs panel data regressions. The resultsshow that 73% of the acquirers display asymmetriccost behavior. A significant negative relation is foundbetween cost stickiness and acquirers’ abnormalreturns following the merger announcement.Competition in the market for corporate controlis positively related with acquirer returns butexacerbates the negative effects of cost-stickinesson abnormal returns of acquirers. The acquirers’ riskof default is significantly negatively related to theabnormal returns they generate. This adverse effectof default risk on returns is stronger for acquirerswith anti-sticky costs. Acquirer risk offsets thepositive effects of competition on returns. Acquirerswith sticky costs have lower abnormal returns thanthose with anti-sticky costs in a one-year window.The present study contributes to the literature byrevealing the asymmetric cost behavior of acquirersinvolved in merger activity during the last decade,and provides evidence for an alternative explanationfor the lower abnormal returns of the acquiring firms.
AU  - UGURLU, MINE
AU  - Danisman, Gamze Ozturk
AU  - Bilyay Erdogan, Seda
AU  - Vural Yavaş, Çiğdem
DO  - 10.21121/eab.536640
PY  - 2019
JO  - Ege Akademik Bakış
VL  - 19
IS  - 3
SN  - 1303-099X
SP  - 323
EP  - 339
DB  - TRDizin
UR  - http://search/yayin/detay/388231
ER  -