SDMIMD Journal of Management

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The event study methodology is extensively used to evaluate the impact of Merger & Acquisition activity on the wealth status of shareholders. This method, as shown in this paper, suffers from serious conceptual deficiencies. Consequently and more importantly it is likely to lead the researchers to arrive at erroneous inferences and conclusions defeating the very purpose of any research investigation.

In this paper, an attempt is made to develop a new approach to event study methodology which would be free from the conceptual deficiencies of the traditional method. With the help of a case study of merger & acquisition activity in the Indian banking industry during the last decade, it is pointed out that the conclusions

under the traditional method and the new method could be totally different and even dichotomous.


Keywords

Mergers & Acquisitions, New Econometric Approach to Event-Study Methodology, Shareholder Wealth Status.
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