9th Joint International Conference on Information Sciences (JCIS-06)

Information Asymmetry at Merge and Acquisition - An Investigation on Firms in the Electric Industry

Authors
Chi-Yun Hua 0, Wen-Chih LEE, Yao Min-Li, Chin Wei-Ming
Corresponding Author
Chi-Yun Hua
0Department of Accounting, Fu-Jen CatholicUniversity
Available Online October 2006.
DOI
https://doi.org/10.2991/jcis.2006.48How to use a DOI?
Keywords
Merge & Acquisition Announcement, Market Microstructure, VAR Model, Bid-Ask Spread, Information Asymmetry
Abstract
The prior studies are focus on the association between merge and acquisition (M&A) announcement and stockholders’ wealth. There are few studies examining the change in the level of information asymmetry at M&A announcement. Our study, therefore, goes to fill out the aspect. This paper empirically investigates the change in asymmetric information at M&A announcement with a model proposed by Hasbrouck (1991b) and Brooks (1996). The model uses stock price, bid-ask quote, and trading volume via VAR model to derive a new proxy (Rw2 ) of price variance for the level of asymmetric information change among investors. The sample includes 30 firms with the M&A events in the electronic industry as listed in the Taiwan primary market. The findings indicate that M&A announcements, based on this study, has information contents but do not effectively reduce the level of asymmetry.
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Proceedings
9th Joint International Conference on Information Sciences (JCIS-06)
Part of series
Advances in Intelligent Systems Research
Publication Date
October 2006
ISBN
978-90-78677-01-7
DOI
https://doi.org/10.2991/jcis.2006.48How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Chi-Yun Hua
AU  - Wen-Chih LEE
AU  - Yao Min-Li
AU  - Chin Wei-Ming
PY  - 2006/10
DA  - 2006/10
TI  - Information Asymmetry at Merge and Acquisition - An Investigation on Firms in the Electric Industry
BT  - 9th Joint International Conference on Information Sciences (JCIS-06)
PB  - Atlantis Press
UR  - https://doi.org/10.2991/jcis.2006.48
DO  - https://doi.org/10.2991/jcis.2006.48
ID  - Hua2006/10
ER  -