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Title: Effects of targets’ intangibles and acquirers’ capital intensity on announcement returns.
Authors: Chia, Norman.
Lin, Xuguang.
Quek, Ngee Poo.
Keywords: DRNTU::Business::Accounting::Intangibles
DRNTU::Business::Finance::Mergers and acquisitions
Issue Date: 2011
Abstract: This paper studies how intangibles of target firms and capital intensity of acquirer firms affect merger announcement returns as measured by cumulative abnormal returns (CAR). We first focus on the established effect of different variables that past studies have shown to play a part in merger announcement returns. Holding these variables constant, we introduce various measures of intangibles and capital intensity to study their effects on merger announcement returns. Our results show that intangibles (as measured by target’s Intangibles/R&D/Amortisation as a percentage of total assets) do show a significant positive loading on merger announcement returns. As for capital intensity, two of our three variables/proxies used – Capex and PPE growth exhibit significant positive loadings on CAR. Hence, capital intensity also displays a positive loading on merger announcement returns.
Rights: Nanyang Technological University
Fulltext Permission: restricted
Fulltext Availability: With Fulltext
Appears in Collections:NBS Student Reports (FYP/IA/PA/PI)

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