We show that some influential literature supporting the RPM efficiency view is flawed when it relies on the presale service justification for RPM. In particular we consider presale services that do not modify in use value of a good, what we term sterile services. We debunk what we call the Bork...

A structural event study methodology accounts for the interaction of two M&A effects: synergy (total value) and dominance (bargaining power). This interaction jointly (simultaneously) determines the parties’ abnormal returns. We propose an instrumental variable approach. An application in...

There are more than 500 event studies in the top finance journals, which can broadly be split into 2 subgroups depending on whether firms are all affected at the same time, like banks reacting to new regulation, or different firms are affected at different times, like mergers and acquisitions...

Winners of the Brazilian privatization auctions (BPAs) earned, on average, a 0.7 percent abnormal return on the days of the auctions. This translates into 13 percent underpricing. In contrast, using results from the literature as a reference, seasoned share issue privatizations register less...

Some claim that the event-study methodology literature is quot;maturequot;. But the overlooked IVWA-based test is more powerful than conventional tests. Its implementation requires the same inputs as the traditional test. Its functional form yields the power improvement. Using CRSP monthly data...

The Brazilian privatization program raised about US$100 billion as a result of the sale of state-owned firms and assets over the period 1990 to 2001. Despite official claims that the privatization auctions were successful in revenue raising, statistical evidence suggests that the buyers, not the...