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Full-Text Articles in Business
Investors' Evaluations Of Price-Increase Preannouncements, Leon Gim Lim, Kapil R. Tuli, Marnik G. Dekimpe
Investors' Evaluations Of Price-Increase Preannouncements, Leon Gim Lim, Kapil R. Tuli, Marnik G. Dekimpe
Research Collection Lee Kong Chian School Of Business
Several firms preannounce their price increases with the expectation that such announcements will be evaluated favorably by investors. However, little is known about the actual effect they have on shareholder value. Accordingly, the authors present the first systematic empirical examination of investors' evaluations of 274 price-increase preannouncements (PIPs). Results show that whereas the average increase in abnormal returns following a PIP is 0.51%, almost 41% of the PIPs result in negative abnormal returns. To explore this heterogeneity, the authors propose a conceptual framework that focuses on three key pieces of information that investors can use when evaluating a PIP: information …
Acquiring Organizational Capital, Peixin Li, Frank Weikai Li, Baolian Wang, Zilong Zhang
Acquiring Organizational Capital, Peixin Li, Frank Weikai Li, Baolian Wang, Zilong Zhang
Research Collection Lee Kong Chian School Of Business
Organizational capital is the accumulation and use of private information to enhance economic efficiency for a firm. Theory has argued that organizational capital is typically embodied in employees and the organizational structure, and is hard to transfer across organizations. In this paper, we study whether organizational capital is transferable across firms via mergers. The evidence shows that acquirers gain more from acquiring firms with higher organizational capital and acquirers are also willing to pay a higher premium for higher organizational capital targets. The evidence suggests that acquiring higher organizational capital targets creates synergies which are shared between acquirers and targets.