IPO relative difficulty, M&A option and size effect

doi:10.1016/j.asieco.2021.101350

	IPO relative difficulty, M&A option and size effect
	Wan, Die 3; Yang, Teng 2; Yang, Xiaoguang 1
刊名	JOURNAL OF ASIAN ECONOMICS
	2021-10-01
卷号	76 页码:17
关键词	Small firm premium IPO Merger and acquisition Financing difficulty
ISSN号	1049-0078
DOI	10.1016/j.asieco.2021.101350
英文摘要	Size effect in the Chinese stock market is huge from 2012 to 2017. We empirically identify a driving force behind the effect: M&A option caused by IPO and M&A policies changes. We show that the M&A frequency increases and the acquirers' market value deceases as the IPO relative difficulty rises, small firm premium is positively related to both IPO relative difficulty and M&A frequency, and among the listed firms that have stronger tendency to merge or acquire a private firm, size effect is significantly larger. These results hold when controlling reverse merger probability. In sum, we reveal a new mechanism: Compared with a large public firm, a small one is more likely to acquire a private firm with discount since both the acquired and the acquirer benefit more, so the stock price of a small firm contains a larger part of M&A option. This option value increases as IPO relative difficulty rises.
资助项目	National Natural Science Foundation of China[71850008] ; Zhejiang Provincial Natural Science Foundation[LY21G010001] ; Hangzhou Philosophy and Social Science Planning Project[Z21JC101]
WOS研究方向	Business & Economics
语种	英语
出版者	ELSEVIER
WOS记录号	WOS:000696998600005
内容类型	期刊论文
源URL	[http://ir.amss.ac.cn/handle/2S8OKBNM/59266]
专题	中国科学院数学与系统科学研究院
通讯作者	Wan, Die
作者单位	1.Chinese Acad Sci, Acad Math & Syst Sci, Beijing, Peoples R China 2.Yinhua Fund Management Co Ltd, Dept Quantitat Investment, Beijing, Peoples R China 3.Zhejiang Gongshang Univ, Sch Finance, Off 830 Main Bldg,18 Xuezheng Rd, Hangzhou 310018, Peoples R China
推荐引用方式 GB/T 7714	Wan, Die,Yang, Teng,Yang, Xiaoguang. IPO relative difficulty, M&A option and size effect[J]. JOURNAL OF ASIAN ECONOMICS,2021,76:17.
APA	Wan, Die,Yang, Teng,&Yang, Xiaoguang.(2021).IPO relative difficulty, M&A option and size effect.JOURNAL OF ASIAN ECONOMICS,76,17.
MLA	Wan, Die,et al."IPO relative difficulty, M&A option and size effect".JOURNAL OF ASIAN ECONOMICS 76(2021):17.