Abnormal returns and in-house mergers and acquisitions

Wallace N. Davidson, Shenghui Tong, Pornsit Jiraporn

Research output: Chapter in Book/Report/Conference proceedingChapter


Some firms choose not to use an investment bank advisor in mergers and acquisitions (M&A) transactions. We test whether this decision affects the merger announcement period returns. We compare the abnormal returns from a sample of 179 in-house acquisitions (in which either the acquirer or the target firm does not hire an investment bank advisor) to those of a matched sample of acquisitions (in which all firms hire an investment bank advisor). We find that not employing a financial advisor has no significant effect on the abnormal returns of acquiring firms but does reduce the abnormal returns of target firms. This relation holds even after controlling for various firm and merger characteristics.

Original languageEnglish (US)
Title of host publicationResearch in Finance
EditorsJohn Kensinger
Number of pages21
StatePublished - 2012

Publication series

NameResearch in Finance
ISSN (Print)0196-3821

All Science Journal Classification (ASJC) codes

  • Finance


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