THE EFFECT OF INSTITUTIONAL OWNERSHIP ON ABNORMAL M&A RETURNS
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2020-08-10
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en
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Abstract
This thesis empirically analyses the effect of institutional ownership on the abnormal returns of an M&A-announcement. Literature stipulates that institutional activism as a corporate governance mechanism decreases wasteful management behaviour and provides positive effects to an M&A-announcement’s returns. Using OLS-analyses and adopting marginal analyses it is shown that this is not the case. Robust results are presented showing that institutional ownership in the U.S.A., the U.K. and Japan provides negative effects on the returns of M&A-announcements in between 2009 and 2019. More importantly, it is found that firms with a dispersed institutional ownership structure, a small amount of assets and a smaller market capitalisation are the driving force behind the negative effects of institutional ownership on the CARs of an M&A-announcement.
Keywords: Mergers & Acquisitions; Corporate Governance Mechanisms; Institutional ownership; Institutional activism; Marginal Analysis
Author: Vleugels,
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Faculteit der Managementwetenschappen