Three Essays on Mergers and Acquisitions: Target Stock Price Crash Risk of Low-Premium Deals and Target Green Technological Innovations

This thesis comprises three research papers on the outcomes of mergers and acquisitions (M&As). Chapter 1 briefly introduces the thesis. In Chapter 2, we develop a theoretical model investigating how opinion divergence among risk arbitrageurs on the stock price valuation of target firms affects the stock price crash risk of target firms in ongoing M&As. In Chapter 3, we find empirical evidence that target firms offered with lower initial premiums tend to face higher stock price crash risk in ongoing M&As. Additional tests reveal that low initial offer premiums increase the stock price crash risk of target firms by widening the divergence of opinions among risk arbitrageurs. Chapter 4 examines whether and how green technological innovations affect firms’ long-run environmental, social, and governance (ESG) performance through a quasi-experiment involving M&As with green patents. Chapter 5 concludes the thesis.