Evaluation of merger premium and firm performance in Europe

This 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

Funding Business Education Programmes for Sustainable Development in the Niger Delta

The study investigated funding business education programmes for sustainable Development in the Niger Delta.  Two research questions were posed to guide the study and one hypothesis was formulated and tested at 0.05 level of significance.  The entire population of 138 was studied by the researchers and no sample/sampling was considered necessary as the study observed a purposive design.  Data for this study were collected by means of questionnaire developed by the researchers and titled “Funding of Business Education Programmes for Sustainable Development in the Niger Delta (FBEPFSDND’’.  A total of 120 lecturers who returned their instrument amounting to 89 percent return rate were studied.  The FBEPFSDND has two parts “A” and “B”.  Part A sought information on the selected personal background of the respondents, and it contained three items.  Part B sought information on the view of the lecturers regarding the topic of the study and was broken into two as each contained six question items.  The questionnaire adopted a modified four point Likert scale designed as Strongly Agreed (SA = 4 points); Agreed (A = 3 points); Disagreed (DA = 2 points) and Strongly Disagreed (SDA = 1 point).  Test-retest method was used to test the reliability of the items with face and content validity.  Validity was done by six lecturers, other than those used for the study and a reliability co-efficient of 0.89 was obtained.  Mean rating and standard deviation was used to analyse the research questions while Z-test was used to test the hypothesis.  Findings revealed that business education programmes is not effectively funded within the Niger Delta Area, also the challenges in business education programmes can be minimized through specific budgetary allocation, favourable government policies with effective funding of business education programmes, effective management of available financial and material resources and experts in headship of business education programmes.  Based on the findings, discussions were made and conclusions drawn, recommendations made amongst others were that Federal and State Government should adequately fund business education programmes to overcome some of its challenges, experts in business education should be used as headship of the programmes.  This is because non-experts as headship of business education will not understand the actual need and challenges to the programmes, TETFUND, ETF and PTDF should be made to fund the universities appropriately which in turn will help business education programmes if adequate allocation is given to the universities, and a chatter on funding business education programmes in our institutions of learning should be the focus of business educators. Keywords: Funding, Business Education, Programmes, Sustainable, Development, Niger Delta

Are serial acquirers good targets for acquisition? An accounting perspective

This study uses the positivist agency theory to examine if serial acquirers with consistently negative cumulative abnormal returns over their past acquisitions are more likely to become targets themselves. The study is based on the assumption that firms that make repeated value reducing acquisitions and depress their stock price are more attractive targets than firms that make good returns to their shareholders through acquisitions, and whose share prices increase correspondingly. Our findings show that serial acquirers that are considered bad bidders are more likely to become targets themselves compared to those that are considered good bidders. While this is the case in the USA and Europe, we find limited evidence to show that the same disciplinary tool is applicable in other parts of the world

The Impact of International Financial Reporting Standards Adoption and Banking Reforms on Earnings Management: Evidence from Nigerian Banks

This study examines stock market reaction and the impact of IFRS adoption on the Nigerian stock market. The paper also evaluates the effect of the Central Bank of Nigeria (CBN) reforms on earnings management of Nigerian banks. The result indicates no evidence of any significant effect on the market but a negative stock reaction in the medium term. Our finding highlights the mixed impact of IFRS adoption on earnings management, but a significant decrease in earnings management in the post CBN reforms. Our study shows that adoption of IFRS was wrongly timed in Nigeria as the fragile investors’ sentiment which was just recovering from the shock of the global financial crisis could have been weakened by the negative market returns. These results have signal effect on investors

The impact of international financial reporting standards on fund performance

Purpose The purpose of this paper is to examine the effect of international financial reporting standards (IFRS) on the performance of UK investment closed-end trust funds with domestic equity focus using Carhart’s Four-Factor model. Design/methodology/approach The paper is based on the Efficient Market Hypothesis, which argues that all available information is already included in the price of assets, and therefore, investors cannot beat the market or generate abnormal returns. Findings The results show that on average, UK investment trusts neither do generate abnormal returns, nor is their performance persistent. This paper provides empirical evidence to support the efficient market hypotheses and provides proof that the adoption of IFRS has, on average, a decreasing impact on the excess returns generated by UK investment trusts. Originality/value The findings of this paper have business policy implications for investment trust in the UK

The Roles of Accounting Valuations and Earnings Management in the Survivorship of Technology Firms during the Global Financial Crisis

This study examines the survivorship of technology firms listed on the NASDAQ market during the immediate and post-2008 global financial crisis period. Underpinned by contingency theory, this study demonstrates the varying roles of accounting valuation and earnings management metrics in the technology industry. Findings in this chapter show during the global financial crisis periods, technology firms have greater survivorships when they are undervalued, and possess a lesser degree of discretionary earnings (DA). The DA factor is a double-edged sword for technology firms since it has positive and negative effects on the returns and survivorships, respectively. The research and development (R&D) variable remains a positive component for both returns and survivorships of these firms

Are serial acquirers good targets for acquisition? An accounting perspective

This study uses the positivist agency theory to examine if serial acquirers with consistently negative cumulative abnormal returns over their past acquisitions are more likely to become targets themselves. The study is based on the assumption that firms that make repeated value reducing acquisitions and depress their stock price are more attractive targets than firms that make good returns to their shareholders through acquisitions, and whose share prices increase correspondingly. Our findings show that serial acquirers that are considered bad bidders are more likely to become targets themselves compared to those that are considered good bidders. While this is the case in the USA and Europe, we find limited evidence to show that the same disciplinary tool is applicable in other parts of the world

The impact of International Financial Reporting Standards (IFRS) adoption on Foreign Direct Investments (FDI): Evidence from Africa and implications for managers of education

Foreign direct investments have been shown by previous studies to promote economic growth and development especially in the emerging markets through human capital development and technology transfer. In this study, adopting the International Financial Reporting Standards (IFRS) is considered a way of attracting FDI, improving comparability in financial reporting, reducing information asymmetries and cost for foreign investors. The effect of regulatory quality is found as an incentive for quality of accounting information and compliance to the IFRS by firms. Using the fixed effect model for the regression and a sample of 48 countries in Africa, we find that adoption of IFRS has a positive effect on the flow of FDIs. We also established that regulatory quality is an incentive for compliance to IFRS standards. The results which are very necessary for managers of education (teachers of accounting education), show that IFRS adoption by African countries will boost the flow of FDIs by increasing comparability. Improving regulatory quality will further strengthen the effect of IFRS adoption on the flow of FDI as it also enhances transparency