Dr. Sandra Mortal’s Paper Accepted in JFQA
For release: May 30, 2013
FCBE Associate Professor in the Department of Finance, Dr. Sandra Mortal, recently
had a paper accepted for publication in the Journal of Financial and Quantitative Analysis, which is among the top journals in the discipline.
The paper titled, “The Post-Acquisition Returns of Stock Deals: Evidence of the Pervasiveness
of the Asset Growth Effect,” finds that firm asset growth rates are negatively correlated
with subsequent stock returns. It shows that the poor post-deal returns that have
been documented for stock acquisitions are more precisely explained by the return
effects associated with systematically larger asset growth rates for stock deals.
It finds a similar result for other cross-sectional and time-series acquisition effects,
including poor returns for glamour deals, weakly monitored deals, and deals done during
high valuation periods. The paper suggests that the distinguishing characteristic
associated with poor performing acquisitions is simply their tendency to grow assets.
Dr. Mortal co-authored this paper with Dr. Michael Schill from the Darden Graduate
School of Business Administration, University of Virginia.