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Minority Shareholders' Wealth Effects and Stock Market Development: Evidence from Increase-in-Ownership M&As

Petmezas, D (2010) Minority Shareholders' Wealth Effects and Stock Market Development: Evidence from Increase-in-Ownership M&As Journal of Banking and Finance, 34 (3). 681 - 694. ISSN 0378-4266

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Abstract

This paper examines, using a global M&A data set, the relationship between the target firm’s minority shareholders’ returns and a country’s stock market development in deals in which large shareholders increase their ownership stakes. For the purpose of this study, we use two measures of stock market development: (1) turnover over GDP, and (2) turnover over market capitalization. We provide evidence supporting the view that minority shareholders in target firms gain significantly more in countries with high stock market development than their counterparts in less-developed markets. Our results are robust to several firm and deal characteristics and provide evidence to policy makers that the degree of stock market development is a key determinant in improving minority shareholders’ welfare.

Item Type: Article
Additional Information: Copyright 2010 Elsevier. This is the author's version. A definitive version was subsequently published in Journal of Banking and Finance, 44(3), 681-694 DOI:10.1016/j.jbankfin.2009.09.003
Divisions: Faculty of Business, Economics and Law > Surrey Business School
Depositing User: Symplectic Elements
Date Deposited: 01 Mar 2012 13:39
Last Modified: 23 Sep 2013 19:05
URI: http://epubs.surrey.ac.uk/id/eprint/178681

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