The Fallacy of Average Effects: Why Context Matters for European M&A Performance
(2025) BUSN79 20251Department of Business Administration
- Abstract
- Purpose: To investigate whether the U.S.-centred M&A literature translates to the heterogeneous European markets by analysing the impact of economic distress, uncertainty, and relatedness on stock performance.
Methodology: This thesis utilises an event study to provide a perspective on immediate M&A announcement impacts. Subsequently, we examine the acquirer’s post-announcement performance using multivariate cross-sectional regressions by considering the impact of uncertainty and relatedness on Buy-and-Hold-Abnormal-Returns. By introducing five distinct periods of economic distress, we analyse the influence of different macroeconomic environments on M&A performance.
Theoretical perspectives: The theoretical perspectives for this... (More) - Purpose: To investigate whether the U.S.-centred M&A literature translates to the heterogeneous European markets by analysing the impact of economic distress, uncertainty, and relatedness on stock performance.
Methodology: This thesis utilises an event study to provide a perspective on immediate M&A announcement impacts. Subsequently, we examine the acquirer’s post-announcement performance using multivariate cross-sectional regressions by considering the impact of uncertainty and relatedness on Buy-and-Hold-Abnormal-Returns. By introducing five distinct periods of economic distress, we analyse the influence of different macroeconomic environments on M&A performance.
Theoretical perspectives: The theoretical perspectives for this paper consist of agency theory, real options theory, transaction cost economics, resource-based view, signalling theory, dynamic capabilities theory, institutional theory, and market timing theory.
Empirical foundation: This thesis builts upon 1482 M&A transactions announced from 1999 to 2022. The data for each transaction is derived from Capital IQ Pro, augmented with firm- and deal-specific variables, and economic distress indicators for contextualising stock performance.
Conclusions: The results suggest that the salience of uncertainty and relatedness are highly contingent on the macroeconomic environment. This finding highlights the relevance of incorporating contextual components into strategic decision-making when operating within the heterogeneous European markets. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9193246
- author
- Brandt, Thomas Maximilian Felix LU and van Tilburg, Scott LU
- supervisor
- organization
- course
- BUSN79 20251
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- M&A Performance, European Markets, Uncertainty, Relatedness, Economic Distress
- language
- English
- id
- 9193246
- date added to LUP
- 2025-06-26 15:29:11
- date last changed
- 2025-06-26 15:29:11
@misc{9193246,
abstract = {{Purpose: To investigate whether the U.S.-centred M&A literature translates to the heterogeneous European markets by analysing the impact of economic distress, uncertainty, and relatedness on stock performance.
Methodology: This thesis utilises an event study to provide a perspective on immediate M&A announcement impacts. Subsequently, we examine the acquirer’s post-announcement performance using multivariate cross-sectional regressions by considering the impact of uncertainty and relatedness on Buy-and-Hold-Abnormal-Returns. By introducing five distinct periods of economic distress, we analyse the influence of different macroeconomic environments on M&A performance.
Theoretical perspectives: The theoretical perspectives for this paper consist of agency theory, real options theory, transaction cost economics, resource-based view, signalling theory, dynamic capabilities theory, institutional theory, and market timing theory.
Empirical foundation: This thesis builts upon 1482 M&A transactions announced from 1999 to 2022. The data for each transaction is derived from Capital IQ Pro, augmented with firm- and deal-specific variables, and economic distress indicators for contextualising stock performance.
Conclusions: The results suggest that the salience of uncertainty and relatedness are highly contingent on the macroeconomic environment. This finding highlights the relevance of incorporating contextual components into strategic decision-making when operating within the heterogeneous European markets.}},
author = {{Brandt, Thomas Maximilian Felix and van Tilburg, Scott}},
language = {{eng}},
note = {{Student Paper}},
title = {{The Fallacy of Average Effects: Why Context Matters for European M&A Performance}},
year = {{2025}},
}