Acquisitions and shareholder wealth effects: the case of the hospitality industry

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dc.contributor.authorKwansa, Francis A.en
dc.contributor.committeecochairOlsen, Michael D.en
dc.contributor.committeecochairJohnson, Dana J.en
dc.contributor.committeememberMurrmann, Suzanne K.en
dc.contributor.committeememberTse, Eliza C.en
dc.contributor.committeememberEvans, Michael R.en
dc.contributor.departmentHuman Nutrition and Foodsen
dc.date.accessioned2014-03-14T21:10:54Zen
dc.date.adate2006-05-11en
dc.date.available2014-03-14T21:10:54Zen
dc.date.issued1994-05-05en
dc.date.rdate2006-05-11en
dc.date.sdate2006-05-11en
dc.description.abstractThe phenomenon of acquisitions has attracted research interest in the finance literature partly because of its impact on the u.s economy during the decade of the eighties. Whereas an impressive body of knowledge has been accumulated on this subject thus far, the hospitality literature has no empirical studies that seek to explain the nature of this phenomenon in the hospitality industry. Of particular interest in this study was the impact of acquisitions on the shareholder wealth of target hotel and restaurant shareholders. Therefore, there were three purposes in this study: 1) to determine whether stockholders of target hotel and restaurant companies involved in acquisitions earned significant additional wealth, 2) to determine whether there is a difference in the average size of additional wealth created in acquisitions involving hospitality companies versus those involving non-hospitality companies, and 3) to determine whether there is a difference in the average size of additional shareholder wealth accruing to hotel versus restaurant shareholders. The sample consisted of 39 restaurant and 18 hotel target companies acquired between 1980 and 1990. The datasource was the University of Chicago's Center for Research in Securities Prices (CRSP) database. The market model was used to predict stock returns for the target companies thirty days before and after the announcement of the acquisition. The difference between the predicted returns and actual returns for each trading day during this period constituted the abnormal return. The average abnormal returns for all the companies per trading day were cumulated and their significance determined. The results showed that the size of the additional shareholder wealth created when the restaurant companies were acquired was 8.86%, hotels was 29.86%, while the combined sample was 15.47%. These results provided evidence that hotel and restaurant shareholders earn significant abnormal returns during an acquisition, and that there is a significant difference in the size of additional shareholder wealth accruing to hospitality companies versus non-hospitality ones. Furthermore, there was a difference in the average size of abnormal returns earned by hotel shareholders versus restaurant shareholders.en
dc.description.degreePh. D.en
dc.format.extentix, 138 leavesen
dc.format.mediumBTDen
dc.format.mimetypeapplication/pdfen
dc.identifier.otheretd-05112006-154806en
dc.identifier.sourceurlhttp://scholar.lib.vt.edu/theses/available/etd-05112006-154806/en
dc.identifier.urihttp://hdl.handle.net/10919/37759en
dc.language.isoenen
dc.publisherVirginia Techen
dc.relation.haspartLD5655.V856_1994.K935.pdfen
dc.relation.isformatofOCLC# 30826238en
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subject.lccLD5655.V856 1994.K935en
dc.subject.lcshConsolidation and merger of corporations -- United Statesen
dc.subject.lcshHospitality industry -- United Statesen
dc.subject.lcshStockholders -- United Statesen
dc.titleAcquisitions and shareholder wealth effects: the case of the hospitality industryen
dc.typeDissertationen
dc.type.dcmitypeTexten
thesis.degree.disciplineHuman Nutrition and Foodsen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.namePh. D.en

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