Browsing by Author "Aghanya, Daniel"
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Item Open Access The effect of government involvement and payment method on merger and acquisition performance: the case of China(Inderscience, 2019) Nnadi, Matthias; Volokitina, Evgeniia; Aghanya, DanielThis paper applies a sample of 842 to investigate the effect of government involvement and payment methods on merger and acquisition of Chinese listed firms for the period 1993 - 2015. The study employs market model as benchmark to estimate expected returns for several event windows. We find that Chinese acquirer shareholders experience higher returns from the acquisitions in firms with no government involvements than those where government is involved. Our study demonstrates that stock-financed acquisitions maximise the wealth gains of shareholders than cash-backed acquisitions. Our finding further shows that using cash to finance government backed acquisitions yields extra wealth for investors on the announcement date whilst the market experience higher abnormal returns when stocks are used to finance the acquisition of privately held targets. The result of this paper has significant policy implications for both M&A financing decisions and government involvements in merger deals.Item Open Access Evaluation of merger premium and firm performance in Europe(World Academy of Science, Engineering and Technology, 2015-06-30) Nnadi, Matthias; Aghanya, DanielThis paper investigates whether the deal premium affects the performance of the acquiring firms in European mergers and acquisitions (M&As) deals for the period 2000-2013. We find a significant reduction in short-term performance of the acquiring firms after the M&As, reflecting the overpayment hypothesis. Our result also indicates that the negative effect on the performance of the acquiring firms is less pronounced in the long-term. The result confirms the synergy hypothesis and the existence of quadratic relationship between high premium and performance. Our findings are robust as we control for firm and time trends. The findings of our study have implications for companies engaging in acquisitions in Europe.Item Open Access The impact of regulations on compliance costs, risk-taking, and the reporting quality of the EU banks(Elsevier, 2019-12-14) Poshakwale, Sunil S.; Aghanya, Daniel; Agarwal, VineetThe paper examines how the Statutory Audit and Corporate Reporting Directives (SACORD) affect the compliance costs, risk taking and quality of financial reporting of the EU banks. Using a natural experiment, we find that post SACORD, both compliance costs and risk taking increase significantly. However, the implementation of additional regulations seems to be effective in terms of improved quality of financial reporting. When we analyse the impact by size, we find that smaller banks face disproportionately higher increase in compliance costs while larger banks seem to engage in greater risk taking.Item Open Access The impact of statutory audit and corporate reporting directives on compliance costs, risk-taking and reporting quality of the EU banks(European Financial Management Association, 2017-05-01) Aghanya, Daniel; Poshakwale, Sunil S.; Agarwal, VineetThe paper examines the effects of recently introduced Statutory Audit and Corporate Reporting Directives (SACORD) on compliance costs and risk taking of the EU banks. Using data of 80 EU banks and 71 non-EU banks for the period 2004 to 2013, we estimate the effects of SACORD regulation compliance costs, risk taking and quality of reporting. Our results show that the economic effects of SACORD on audit fees are approximately 19 to 33 percent higher relative to the non-EU banks. We also find robust evidence of significant increase in in total compliance costs. The findings are consistent with those reported in the previous literature mainly for the US banks that regulation increases compliance costs. Further, we find that post SACORD, there is a significant increase in risk-taking and a decline in reporting quality. Findings suggest that the SACORD regulation does not appear to have the desired effects of constraining risk-taking by banks.Item Open Access Market in Financial Instruments Directive (MiFID), stock price informativeness and liquidity(Elsevier, 2019-12-23) Aghanya, Daniel; Agarwal, Vineet; Poshakwale, Sunil S.The paper examines the impact of MiFID on stock price informativeness and liquidity in 28 EU countries. We find that post-MiFID the stock prices reflect greater firm specific information and the market becomes more liquid. Consistent with the ‘Catch-up Hypothesis’ our evidence shows that the impact of MiFID in terms of price informativeness is greater for countries that have weaker quality of regulation. We find that regulation with enforcement improves market efficiency. Our results are robust with respect to the choice of price informativeness and liquidity proxies as well as the control sample.