Stock Market Reactions to Knowledge-Motivated Acquisitions

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Advances in Mergers & Acquisitions

ISSN: 1479-361X
Series editor(s): Sydney Finkelstein and Cary Cooper

Subject Area: Strategy

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Document Information:
Title:	Stock Market Reactions to Knowledge-Motivated Acquisitions
Author(s):	Ricardo Romero Gerbaud, Anne S. York
Volume:	6 Editor(s): Cary L. Cooper, Sydney Finkelstein ISBN: 978-0-7623-1381-5 eISBN: 978-1-84950-467-6
Citation:	Ricardo Romero Gerbaud, Anne S. York (2007), Stock Market Reactions to Knowledge-Motivated Acquisitions, in Cary L. Cooper, Sydney Finkelstein (ed.) 6 (Advances in Mergers & Acquisitions, Volume 6), Emerald Group Publishing Limited, pp.127-156
DOI:	10.1016/S1479-361X(07)06006-1 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	This study uses a new, fine-grained, firm-based measure of target resources to investigate the relationship between target resource type and acquirer stock market performance. Our findings suggest that the market punishes acquirers of knowledge-based resources more than those that buy property-based resources due to the perceived uncertainty regarding the value of targets’ knowledge resources. In support of the underlying uncertainty argument, we find that managers announcing knowledge-based mergers provide more information in their press releases than those announcing property-based transactions. While prior studies have suggested that resource relatedness may moderate the resource type and acquisition performance link, our findings do not support either a direct or moderating relationship.