Journal of Corporate Finance Vol. 29 2014
Government asset sales, economic nationalism, and acquirer wealth effects
Abstract
We analyze acquirer wealth effects using a comprehensive sample of government asset sale announcements in 123 countries around the world in 1984–2009. Overall, we find positive abnormal returns to acquirers of state-owned assets. Returns are greater when the acquirer is domestic, when the sale occurs in a developing nation, and when the acquirer itself is not a former state-owned enterprise. Buyers of bailed-out firms experience average abnormal returns of 3.16%, compared to 0.70% for all other government sales. Our results suggest that the market favors acquirers that benefit from divesting governments driven by economic nationalism rather than sale revenue maximization.
- DOI
- 10.1016/j.jcorpfin.2014.09.011
- Volume
- 29
- Pages
- 351-368
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib