Tarcisio da Graca

Ignorance is Bliss? Uncertainty About Product Valuation May Benefit Consumers

Product information which is beneficial for an individual consumer may hurt if disseminated widely. Even with rational expectations, a fallacy of composition may occur if information leads to demand and price increases.

Leaving Money on the Table: Evidence of Underpricing in the Brazilian Privatization Auctions

The Brazilian privatization program raised about US

A structural event study for M&As: an application in corporate governance

100 billion as a result of the sale of state-owned firms and assets over the period 1990 to 2001. Despite official claims that the privatization auctions were successful in revenue raising, statistical evidence suggests that the buyers, not the government, profited from the auctions. Using an event-study methodology and financial market data, I estimated the abnormal returns realized by the winning bidders on the days of the Brazilan privatization auctions. Statistically significant evidence suggests that the acquirers accrued, on average, positive 0.70% abnormal returns on those days. In other words, if the privatization auctions had been able to extract the entire surplus from the buyers, the Brazilian government could have raised another US

Evaluating the Effect of Corporate Governance in M&As with a Structural Approach for Event Studies

13 billion. This finding contrasts with two branches of literature related to mergers and acquisitions in the private sector and to the privatization programs in other countriesThe Brazilian privatization program raised about US

Horizontal Merger Simulation: A Complementary Tool to the Structural Analysis (Simulação De Atos De Concentração Horizontais: Uma Ferramenta Complementar À Análise Estrutural)

100 billion as a result of the sale of state-owned firms and assets over the period 1990 to 2001. Despite official claims that the privatization auctions were successful in revenue raising, statistical evidence suggests that the buyers, not the government, profited from the auctions. Using an event-study methodology and financial market data, I estimated the abnormal returns realized by the winning bidders on the days of the Brazilan privatization auctions. Statistically significant evidence suggests that the acquirers accrued, on average, positive 0.70% abnormal returns on those days. In other words, if the privatization auctions had been able to extract the entire surplus from the buyers, the Brazilian government could have raised another US

More Power to You: Properties of a More Powerful Event Study Methodology

13 billion. This finding contrasts with two branches of literature related to mergers and acquisitions in the private sector and to the privatization programs in other countries

The “Services” Explanation for Resale Price Maintenance: Deleterious Results Missed in the Economics Literature and in Legal Decisions

ABSTRACT We apply structural event study methodology in the context of corporate governance to account for the interaction of two merger and acquisition (M&A) effects: synergy (total value) and dominance (bargaining power). The interaction of these effects simultaneously determines the parties’ abnormal returns. We posit that M&A synergy effects correspond to changes in agency costs between target’s management and target’s shareholders, while the dominance effects correspond to the balance of power between acquirer and target during negotiations. Our structural estimates suggest that more stable or entrenched directors generate higher value during normal operations but are softer negotiators when their firm becomes an acquisition target.

Flawed Economic Models Have Misled RPM Policy: Changes in Canada, Europe and the United States

A structural event study methodology accounts for the interaction of two MA and the dominance effect corresponds to balance of power between acquirer and target during negotiations. Structural estimates suggest that more stable or entrenched directors generate higher value during normal operations but are softer negotiators when their firm becomes an acquisition target.

Acquirers gain twice as much as targets in M&As: a different perspective on a longstanding perception

The authorities of the Brazilian competition system decide upon horizontal mergers and acquisitions that come to their review, applying the traditional structural analysis, as established by the Brazilian horizontal merger guidelines. This article aims at illustrating the refinement that can be achieved in the evaluation process of such cases, by using differentiated product horizontal merger simulation models. Applying both methodologies to hypothetical cases, I illustrate that the simulation results provide more precise information about their likely effects with richer details. This may be accomplished by using the same data required for the structural analysis. The use of the simulation model may also contribute to guide the discussion about the impact of the efficiencies generated by a merger and about the role of potential or real entries of new firms in the market place.