Vijay Gondhalekar

Motives in the Acquisitions of Nasdaq Targets During the Aftermath of the 1987 Crash

After the crash of 1987, the Nasdaq composite index stayed below the precrash level for nearly two years. Takeover activity surged in this after-crash period. We compare the motives in the acquisitions of Nasdaq targets during the after-crash period with those in the ten-year period before the crash. We find that the announcement period return to acquirers and the proportion of acquirers with positive gains declines in the after-crash period. For both the periods, agency is the motive for takeovers that have negative total gains (acquirer p target), but synergy and hubris are comotives for takeovers that have positive total gains. The proportion of takeovers in which the managers of acquirers act against the interest of the shareholders increases after the crash. Copyright 2003 by the Eastern Finance Association.

Do technology alliances create more value than marketing alliances

Strategic alliances play a prominent role in firm competitiveness. While the number of strategic alliances formed increases year after year, the research evidence on alliance success is conflicting. This study compares marketing and technology alliances during the technology era, 1996–2003. The sample size for the two groups is 91 and 109, respectively. On the basis of the Fama-French three-factor model, we find that the stock market considers the announcement of marketing and technology alliances to be a zero NPV project (whether alliance partners are considered individually or not). Also, we find that between alliance partners the larger firms exhibit better bargaining in technology alliances than in marketing alliances.

Financial Performance and the Competitive Effects of Corporate Social Responsibility

Abstract This study examines share price reaction to the enrollment by companies in the Children’s Food and Beverage Advertising Initiative. We find that, on average, in the month of enrollment, shareholders of companies that join the CFBAI experience abnormal return of −3% and so do the shareholders of the immediate competitors that do not join the initiative. However, over the subsequent five years, while the shareholders of companies enrolled in the initiative experience an average abnormal return of +16.6%, that of non-enrolled competitors experience a further abnormal return of −34%. The abnormal returns for the two groups (at the time of enrollment and over the subsequent five years) are uncorrelated and so benefitting at the expense of competitors does not appear to be the motive for enrolling in the CFBAI. The study also provides comparison of number of employees and other important financial ratios before and after enrollment in the CFBAI for the two groups.

Corporate Social Responsibility's Impact on Stock Performance -- The Case of the Children's Food and Beverage Advertising Initiative

This study examines the abnormal returns to the shareholders of companies that have enrolled in the Children’s Food and Beverage Advertising Initiative (CFBAI) as well as those of their competitors that did not join the initiative. We find that, on average, the former group of companies is much larger than the latter. Shareholders of both groups experience significant abnormal return of -3% in the month of enrollment. However, the former group experiences an abnormal return of 16% over the next five years, while those of the latter experience an abnormal return of -34%. These abnormal returns net out to be an average abnormal gain of

Weekend Gold Returns in Bull and Bear Markets

14.5 billion for companies enrolled in the initiative and an average abnormal loss of

Examining the Stock Market Response: A Comparison of Male and Female CEOs

1.7 billion for non-enrolled competitors. The findings suggest that being in a position to be socially responsible is of benefit to shareholders while being ill situated can hurt them.