Please join us in congratulating Dr. Chih Ming Tan, Professor and Page Endowed Chair in Applied Economics for his recent paper accepted for publication in the International Review of Economics and Finance.
Title: “Evaluating the instantaneous and medium-run impact of mergers and acquisitions on firm values”
Authors: Marcelo Bianconi (Tufts University) and Chih Ming Tan (University of North Dakota)
International Review of Economics and Finance
This paper contributes to the literature investigating the impact of mergers and acquisitions (M&A) activity on an acquirer’s firm value. To do so, we exploit a large sample of 65,521 M&A deals globally from the Communications, Technology, Energy and Utilities sectors in the years of 2000-2010. We focus on an enterprise value multiple, the ratio of EV/EBITDA, as a measure of firm value. Using the difference-in-difference (DID) strategy with and without propensity score matching, we find significant evidence of negative medium-run M&A effects and positive instantaneous M&A impact on firm value potentially because EV moves faster relative to a slow moving EBITDA.