Posted: Tuesday, January 3, 2017

A paper by Schroeder School of Business professors Yasser Alhenawi and Martha Stilwell has been accepted for publication in the Review of Quantitative Finance and Accounting. This is a highly esteemed journal recognized by several PhD-granting institutions as a prestigious research outlet.

The paper is co-authored by Alhenawi, associate professor of finance, and Stilwell, assistant professor of accounting.

The manuscript presents and tests a hypothesis that value creation in merger and acquisition (M&A) transactions is determined by not only the target’s pre-acquisition value, as indicated by earlier studies, but also by the acquirer’s competency (among other factors). Further, the paper employs statistical procedures and model-building techniques in order to develop and validate parsimonious Altman-style predictive models, which reasonably identify successful M&A deals. The models are statistically significant, robust to out-of-sample testing, and shed more light on a few existing theories in corporate transforming events.

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