Is the Event Study Methodology Useful for Merger Analysis: A Comparison of Stock Market and Accounting Data

Tomaso Duso, Klaus Gugler, B. Burcin Yurtoglu

Publication: Scientific journalJournal articlepeer-review

11 Downloads (Pure)


This paper presents empirical evidence about the ability of event studies to capture mergers ex-post
profitability as measured by accounting data. We use a sample of large horizontal concentrations during
the period 1990-2002 involving 482 firms either as merging firms or competitors, and contrast a measure
of the mergers profitability based on stock market event studies with one based on balance sheet profit
data. We show that using a long window around the announcement date (25 or 50 days before the event)
increases the ability to capture the ex-post merger effect: the pairwise correlation coefficient is positive
and highly significant.
Original languageEnglish
Pages (from-to)186 - 192
JournalInternational Review of Law and Economics
Issue number2
Publication statusPublished - 1 Dec 2010

Cite this