TY  - JOUR
AB  - Purpose The purpose of this paper is to examine the relationship between price movements of target firms’ stocks and behaviors of local individual, local institutional and foreign investors in trading target firms’ stocks around mergers and acquisitions announcements in Korea.Design/methodology/approach This study uses event study methodology and cross-sectional regressions for abnormal returns.Findings Results reveal that the average abnormal return becomes significantly positive three days prior to the announcement date and becomes insignificant after the announcement date. Results also show that local individual investors tend to sell more intensely prior to announcements for target firms with larger wealth effects. In contrast, foreign investors tend to buy target stocks with larger wealth effects more intensely prior to the announcement date, and then they sell them more intensely in the post-announcement period.Originality/value This paper provides evidence that foreign investors are able to identify target stocks with large wealth effects prior to the announcement date and they realize short-term profits by selling them following the announcement.
VL  - 15
IS  - 4
SN  - 1743-9132
DO  - 10.1108/IJMF-07-2018-0204
UR  - https://doi.org/10.1108/IJMF-07-2018-0204
AU  - Yang Jin Young
AU  - Segara Reuben
AU  - Feng Jingwei
PY  - 2019
Y1  - 2019/01/01
TI  - Stock price movements and trading behaviors around merger and acquisition announcements: Evidence from the Korean stock market
T2  - International Journal of Managerial Finance
PB  - Emerald Publishing Limited
SP  - 593
EP  - 610
Y2  - 2024/04/25
ER  -