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Asymmetric Information and Target Firm Returns

Petmezas, D, Croci, E and Travlos, N (2012) Asymmetric Information and Target Firm Returns European Journal of Finance. pp. 639-661.

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This paper examines the relationship between asymmetric information and target firm returns in M&As. We argue that if managers possess favourable (unfavourable) asymmetric information, they will offer, ceteris paribus, a high (low) premium, affecting target firm returns accordingly. We propose several proxies of asymmetric information. The empirical evidence strongly supports our hypothesis as we find that target firm returns are significantly negatively related to asymmetric information regarding synergy gains. Our results are robust after controlling for several target and deal characteristics.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
Petmezas, D
Croci, E
Travlos, N
Date : 2012
DOI : 10.1080/1351847X.2011.599850
Additional Information : © 2011 Taylor & Francis. This is an electronic version of an article published in European Journal of Finance, pp.1-23 (2011).European Journal of Finance is available online at
Depositing User : Symplectic Elements
Date Deposited : 28 Mar 2017 15:02
Last Modified : 31 Oct 2017 14:22

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