Corporate takeover and shareholders’ wealth in Hong Kong

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Abstract

In this study, we examined the effect of a corporate takeover on the shareholders’ wealth in the Hong Kong equity market between 1986-1991. The regulatory framework for takeovers in Hong Kong is different from the UK. Under this regulatory framework, we find that the shareholders of target firms obtain large positive abnormal returns around the announcement day. In contrast, there are no significant abnormal returns for the shareholders of bidding firms. Finally, excess trading volume of target firms occurs before the event day. These results indicate that the takeover event is anticipated. Copyright © 1993 Academic Press. All rights reserved.

Original languageEnglish
Pages (from-to)213-226
JournalThe British Accounting Review
Volume25
Issue number3
DOIs
Publication statusPublished - Sep 1993

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Hong Kong
Regulatory framework
Shareholders
Shareholder wealth
Abnormal returns
Corporate takeovers
Trading volume
Equity markets
Bidding
Large firms
Announcement

Citation

Cheung, Y.-L., & Shum, C.-K. (1993). Corporate takeover and shareholders’ wealth in Hong Kong. The British Accounting Review, 25(3), 213-226.