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Corporate acquisition strategies and economic performance
Author(s) -
Singh Harbir,
Montgomery Cynthia A.
Publication year - 1987
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250080407
Subject(s) - argument (complex analysis) , liberian dollar , business , value (mathematics) , industrial organization , value creation , mergers and acquisitions , product (mathematics) , marketing , monetary economics , economics , finance , biochemistry , chemistry , geometry , mathematics , machine learning , computer science
This research investigates the conceptual argument that acquisitions which are related in product/market or technological terms create higher value than unrelated acquisitions. Related acquisitions are found to have greater total dollar gains than unrelated acquisitions. Acquired firms in related acquisitions have substantially higher gains than acquired firms in unrelated acquisitions. These findings indicate that related target firms benefit more from acquisition than unrelated target firms. Implications of these findings for managers are discussed.