Proceedings of the 9th International Conference on Modern Research in Management, Economics and Accounting
Year: 2018| Page No:102-123
Hedging and the Paradoxical Acquirer Announcement Effects in International Mergers Khurshid Hamid , Robin Stanley Snell
J. Barry Lin
This paper documents a paradoxical acquirer announcement effect: that non-hedging firms exhibit higher (more positive) announcement effect than hedging firms, contradicting earlier studies that document better valuation and performance for hedging firms. We provide evidence consistent with the idea that non-hedging firms exhibit higher information asymmetry and the higher announcement effect over the hedging firms is potentially a form of mis-pricing as a result of the higher information asymmetry.