We examine whether corporate rivals react to industry-specific competition-shocks by increasing product differentiation or, alternatively, by lowering differentiation to capture scale-economies. As rival reactions affect intraindustry cash-flow correlations, these two hypotheses imply...

Overbidding implies a failure to adequately account for the winner's curse. Surprisingly few papers have attempted to develop a direct empirical test of the presence of overbidding in M&A contests. We develop such a test grounded on a necessary condition for profit maximizing bidding behavior;...

We study international mergers and acquisitions from a cross-cultural perspective. We examine in particular (i) which types of cultures are more likely to carry out acquisitions in a different culture to their home society and (ii) which are more likely to complete deals. We use the culture...

On February 1, 2008, Microsoft offered $43.7 billion for Yahoo. This offer was a milestone in the battle between Microsoft and Google to control the Internet search industry. The announcement accompanied a substantial decrease in Microsoft's stock price. Investors apparently considered the bid...

The Capital Purchase Plan (CPP) is one of the main ingredients of the Paulson Plan. In accordance with CPP, U.S. federal agencies invested more than $200 billion in approximately 700 financial institutions between 2008 and 2009. This article examines whether this major public intervention helped...

Recent empirical papers report a declining trend in the cumulative abnormal return (CAR) of acquirers during an Mamp;A program. Does this necessarily imply that acquiring CEOs are infected by hubris and are not learning from previous mistakes? We first confirm the existence of this declining...