DO INVESTORS OVERREACT TO FIRM MERGER AND ACQUISITION DECISIONS?

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dc.contributor.authorCan, Reyhan
dc.contributor.authorDizdarlar, H. Isin
dc.date.accessioned2024-11-07T13:24:23Z
dc.date.available2024-11-07T13:24:23Z
dc.date.issued2021
dc.departmentNiğde Ömer Halisdemir Üniversitesi
dc.description.abstractIntroduction: According to the effective market hypothesis, investors act rationally when making an investment decision. The hypothesis assumes that investors invest in a way that maximizes their returns, taking into account the new information received. If the information released on the market is interpreted in the same way by all investors, no investor would be able to earn above the market. This hypothesis is valid in case of efficient markets. In the event that investors show irrational behavior to the information released on the market, the markets move away from efficiency. Overreaction behavior is one of the non-rational behaviors of investors. Overreaction behavior involves investors overreacting by misinterpreting the new information released to the market. According to De Bondt and Thaler's (1985), overreaction hypothesis in the event that investors overreact to the news coming to the market, after a period the false evaluation, the price of the security is corrected with the reversal movement, without the need of any positive or negative information. Aim: The purpose of this study is to examine investors' overreaction behavior in mergers and acquisitions. For this purpose, overreaction behavior was analyzed for companies whose stocks are traded on the Borsa Istanbul, which were involved in mergers or acquisitions. Method: In the study, companies that made mergers and acquisitions for the period 2007-2017 were determined, and abnormal returns and cumulative abnormal returns were calculated by using monthly closing price data of these companies. Moreover, whether investors overreact to the merger and acquisition decision is examined separately for one-, three- and five-year periods. Findings: As a result of the research, it has been observed that there is a reverse return for one-, three-, and five-year periods. However, it has been determined that the overreaction hypothesis is valid for only one year.
dc.identifier.doi10.1108/S1569-375920210000106007
dc.identifier.endpage118
dc.identifier.isbn978-1-80043-930-6
dc.identifier.isbn978-1-80043-931-3
dc.identifier.issn1569-3759
dc.identifier.startpage103
dc.identifier.urihttps://doi.org/10.1108/S1569-375920210000106007
dc.identifier.urihttps://hdl.handle.net/11480/14070
dc.identifier.volume106
dc.identifier.wosWOS:000844036900009
dc.identifier.wosqualityN/A
dc.indekslendigikaynakWeb of Science
dc.language.isoen
dc.publisherEmerald Group Publishing Ltd
dc.relation.ispartofContemporary Issues in Social Science
dc.relation.publicationcategoryKitap Bölümü - Uluslararası
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.snmzKA_20241106
dc.subjectOverreaction hypothesis
dc.subjectefficient market hypothesis
dc.subjectbehavioral finance
dc.subjectmergers
dc.subjectacquisitions
dc.subjectdecisions
dc.titleDO INVESTORS OVERREACT TO FIRM MERGER AND ACQUISITION DECISIONS?
dc.typeBook Chapter

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