Article

Growth strategies and value creation: what works best for stock exchanges?

Bank of Finland, Research Discussion Papers 01/2010; DOI:10.2139/ssrn.1559888
Source: RePEc

ABSTRACT In recent years, demutualized stock exchanges have increasingly engaged in M&A and alliance activities. To shed light on this topic, we investigate short-run share price responses to the formation of 110 stock exchange M&As and alliances in the period 2000–2008. Our findings show that the average stock-price responses to a stock-exchange M&A or alliance is positive. Stock exchange M&As create more value than alliances. For alliances, joint ventures generate more value than non-equity alliances. More value is created when the integration is horizontal and cross-border than when it is vertical and domestic. Evidence is also found for learning-by-doing effects in stock exchange integration activities. Finally, we find that the better the shareholder protection, accounting standards and degree of capital market development in the partnering exchange’s country, the higher the merger and alliance premium. These patterns also obtain when we examine long-run performance measures such as the three-year buy-and-hold abnormal return, change in ROA (ROE), change in liquidity, and change in market capitalization of IPO between years t-2 and t+2.

0 0
 · 
1 Bookmark
 · 
61 Views
  • Source
    Journal of Law and Economics. 02/1979; 22(2):233-61.
  • Source
    [show abstract] [hide abstract]
    ABSTRACT: In this paper we analyze the demutualization of exchanges. Over the last 5 years nineteen stock markets had privatized, and consequently changed their governance structure. The most important finding is that exchange privatizations appear to be value-enhancing changes.
    08/2003;
  • Source
    [show abstract] [hide abstract]
    ABSTRACT: This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.
    Journal of Financial Markets. 01/1999; 2(4):329-357.

Full-text (4 Sources)

View
53 Downloads
Available from
Jul 8, 2013