Information Asymmetry and Bidders' Gains

Draper, Paul; Paudyal, Krishna

doi:10.1111/j.1468-5957.2008.02082.x

Cited by 55 publications

(49 citation statements)

References 35 publications

(32 reference statements)

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“…Analysts generate and disseminate firm-related information to the markets. Therefore, firms that have more extensive analyst coverage should have less information asymmetry (Draper and Paudyal, 2008) and, therefore, less active trading of their stocks. On the other hand, if financial analysts systematically make errors in their forecasts, consequent revisions should generate more active stock trading.…”

Section: H4mentioning

confidence: 99%

The determinants of foreign trading volume of stocks listed in multiple markets

Dodd

Louca

Paudyal³

2015

Journal of Economics and Business

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We examine the determinants of the foreign trading volume of European stocks listed in multiple markets. The results suggest that stocks that cross-list in foreign markets that are larger and more liquid than their home markets, and stocks for which foreign investors acquire information at a lower cost, experience higher volumes of trade in foreign markets. Stocks that are cross-listed in the US are more attractive to foreign traders than those crosslisted in European markets. Differences in motives to trade in American vs. European markets are also uncovered. Among the fundamental motives to trade, diversification benefit and stock risk are more important for investors trading in American markets while the difference in trading costs is more vital for investors in European markets. Among the informational motives to trade, the firm's presence in foreign product markets and the foreign information factor are significant determinants of trading in American markets but not in European markets. The Determinants of Foreign Trading Volume of Stocks Listed in Multiple Markets AbstractWe examine the determinants of the foreign trading volume of European stocks listed in multiple markets. The results suggest that stocks that cross-list in foreign markets that are larger and more liquid than their home markets, and stocks for which foreign investors acquire information at a lower cost, experience higher volumes of trade in foreign markets. Stocks that are cross-listed in the US are more attractive to foreign traders than those crosslisted in European markets. Differences in motives to trade in American vs. European markets are also uncovered. Among the fundamental motives to trade, diversification benefit and stock risk are more important for investors trading in American markets while the difference in trading costs is more vital for investors in European markets. Among the informational motives to trade, the firm's presence in foreign product markets and the foreign information factor are significant determinants of trading in American markets but not in European markets.

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Section: H4mentioning

confidence: 99%

The determinants of foreign trading volume of stocks listed in multiple markets

Dodd

Louca

Paudyal³

2015

Journal of Economics and Business

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“…In the UK, which is the focal point of this study, the majority (approximately 80%) of target firms are privately held companies (Chang, 1998;Draper & Paudyal, 2008). Chang (1998) argues that takeovers of private targets via share payment tend to create large block shareholders as the ownership of private targets is highly concentrated.…”

Section: Introductionmentioning

confidence: 99%

The market valuation of M&A announcements in the United Kingdom

Andriosopoulos¹,

Yang

2016

International Review of Financial Analysis

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This paper investigates the short-term market reaction to UK acquirers announcing domestic and foreign mergers and acquisitions (M&As) from 2000-2010. We define acquirers as value, moderate and glamour acquirers based on equally weighted market-to-book terciles. We find that value acquirers outperform glamour acquirers during and after the M&A announcement. We also focus on the impact of institutional ownership and find that higher domestic, foreign and total institutional ownership leads to lower market reaction to M&A announcements. We also find that long-term institutional investors lead to a higher post-announcement market performance. Finally, we find that a higher domestic institutional ownership mitigates the typical poor short-term performance following M&A announcements of glamour acquirers

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“…Evidence in support of the Shleifer and Vishny (SV) hypothesis has been found in both the US (Ang and Cheng, 2006;Dong, Hirshleifer, Richardson and Teoh, 2006;Savor and Lu, 2009) and in the UK (Bi and . The announcement period evidence in Draper and Paudyal (2008) also provides some support for this hypothesis. This poses the problem of finding a proxy for the unobservable investment opportunity set.…”

Section: Literature Review and Background To The Research Designmentioning

confidence: 71%

“…In calculating short run returns, we use a simple market adjusted returns model using the FT All Share Index (FTASI) as our market proxy, to calculate cumulative abnormal returns over the intervals day t-20 to day t+20, day t-5 to day t+5, and day t-2 to day t+2. Draper and Paudyal (2008) also employ a market adjusted returns model. We favour a simple market adjusted returns measure as it avoids any thin trading problems inherent in using daily returns to calculate market-model parameters.…”

Section: Methodsmentioning

confidence: 99%