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- W1997870345 abstract "Purpose – The purpose of this paper is to examine the stock price movements for existence of informed trading prior to a merger announcement for the companies listed on the emerging markets of India for the period from 1996 to 2010. Design/methodology/approach – This study applies several event study methodologies and regression analyses to analyze the stock price movement surrounding a merger announcement. The paper divides mergers in two different types: industry merger cases and non-industry merger cases and in two different time periods: recession and boom. Findings – The results show that the information held only by insiders’ works its way into prices. The paper finds strong evidence of insider trading in the case of industry mergers and mergers during recessions. Practical implications – The results from this study have immediate policy implications for India and other developing markets as the paper provides the type of mergers and time periods when merger announcements are more susceptible to insider trading. Originality/value – The paper extends the literature on mergers and insider trading by analyzing firms trading on a developing capital market, which, unlike the developed markets, is characterized by inadequate disclosure and a weaker enforcement of securities regulations. The results support this notion and recommend Indian securities market regulators to tighten the lax regulations. In addition, the author document the divergence in price reaction to the merger announcements for different types of mergers: industry mergers and non-industry mergers, as well as for mergers during different market conditions: recession vs booming capital markets." @default.
- W1997870345 created "2016-06-24" @default.
- W1997870345 creator A5021845791 @default.
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- W1997870345 date "2014-07-08" @default.
- W1997870345 modified "2023-10-14" @default.
- W1997870345 title "Stock price movement around the merger announcements: insider trading or market anticipation?" @default.
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- W1997870345 doi "https://doi.org/10.1108/mf-09-2013-0256" @default.
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