This document examines the impact of mergers and acquisitions on corporate governance and market efficiency during the COVID-19 pandemic, using event study methodology.
Extract
[...] However, considering the global impact of COVID19 on markets, it is strange that there are few studies today that integrate current research on mergers and acquisitions and apply it to the subject. Tampakoudis, et al. (2021) is the only one to have conducted a study in this sense as it investigated American acquirers during the COVID19, more particularly on ESG investments that led to an increase or decrease in shareholder wealth during the pandemic period. We believe that there are still many unanswered questions regarding the effect of COVID19 on the mergers and acquisitions market. [...]
[...] C., MECKLING W. H. (1976) Theory of The Firm: Managerial Behaviour, Agency Cost and Ownership Structure, Journal of Financial Economics 305-360. - Kuhn Th., (1962) The structure of scientific revolutions, Traduction française : La structure des révolutions scientifiques, Paris, Flammarion, 1970. - Louizi, A. & Kammoun, D. (2016). The Positioning of Rating Agencies in the Evaluation of the Corporate Governance System. Gestion 149-175 - Martynova, M. [...]
[...] whose members do not have the same approach to problems and solutions to be implemented. In this context, two main cognitive roles of governance mechanisms must be taken into account: the invention of opportunity and the alignment of mental schemes. The invention of opportunities can be done in two ways. The first consists of providing advice to the manager. The idea is that providing advice to the manager allows the latter to make better decisions (i.e. decisions resulting in superior performance compared to what would have resulted from the absence of advice). [...]
[...] We must also note that, although 40% remain stable, only decline, which is very low compared to our other tests. The increase shows that the governance rating continues to improve even a year after the operation. This may lead to thinking that the effects of the governance rating after an M&A operation are superior to one year and continue to improve the governance rating of companies in the COVID19 period. Year N Increase Decline Stable 50% 19% 31% III. Discussion of the results obtained A. Analysis of the results of the study 1. [...]
[...] (2021), abnormal returns were, on average, better during the COVID pandemic.19, compared to the previous period. However, these results are exclusive to the US market of mergers and acquisitions. What would be the result if we studied another region often cited in the literature, namely Europe? European governments have also widely offered financial aid to their industries and companies during the COVID pandemic.19, in the form of financial relaunch plans (IMF, 2021). Furthermore, although not as impressive, European stock markets have also shown rapid evolution. [...]
