§16§Doctoral Thesis / Dissertation from the year 2008 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: Summa cum Laude, European Business School - International University Schloß Reichartshausen Oestrich-Winkel, 129 entries in the bibliography, language: English, abstract: Empirical corporate finance research analyzes the link between major corporate decisions and the shareholder value development of the respective companies.Enhancing the welfare of shareholders is a fundamental and common objective of all firms and corporate managers are required to implement policies consistent with shareholder welfare. However, the financial literature shows that major corporate decisions are not associated with stock market gains to the respective companies. Especially, the mergers and acquisitions related literature shows that the returns to bidding firm shareholders are essentially zero when they pursue an acquisition. Due to these empirical results, th §16§ere is an ongoing debate why so many value decreasing decisions occur and how the success of corporate actions is related to company specific internal characteristics and the firms' external environment. Timo Gebken's dissertation contributes to this debate.Timo links the time series behavior of industry specific M〓16§by significantly positive returns to the merging firms and by positive intra-industry effects. In contrast, at the end of an industry merger wave, the shareholder wealth effects are significantly negative. To explore the reason for these results, Timo links the gains to the merging firms to the respective intra-industry effects and to key target characteristics. He shows that targets often possess very scarce resources towards the end of an industry merger wave. The corresponding increased competition for the "last"targets leads to increasing competitive effects at the intra-industry level and to higher premiums paid by bidding firm shareholders. Due to these mechanisms, the gains associated with M&A activity decrease significantly as an industry-specific consolidation process continues.
