Government Ownership and Managers’ Role: Effect to Acquisition Return Among High-Technology Companies

• Main Authors: Norhamiza Ishak, Hanita Kadir Shahar, Kamarun Nisham Taufil Mohd
• Format: Article
• Language: English; English
• Published: Penerbit USM 2023
• Subjects: HB1-3840 Economic theory. Demography; HG4530 Investment companies. Investment trusts. Mutual funds
• Online Access: https://eprints.ums.edu.my/id/eprint/38436/1/ABSTRACT.pdf; https://eprints.ums.edu.my/id/eprint/38436/2/FULL%20TEXT.pdf; https://eprints.ums.edu.my/id/eprint/38436/; https://doi.org/10.21315/aamjaf2023.19.2.10

This study investigates the effect of high-technology (high-tech) company acquisitions and GLIC ownership on shareholders’ value creation. Study samples for empirical analyses were carried out using the market-model event-study and multivariate analysis on studies published between 2011 and 2018. The findings indicate that; (i) The CAR for high-tech acquiring firms for the three-day event window (–1,1), five-day event window (–2, +2) and 11-day event window led to significant positive returns, with at least at 10% level, signifying that investors have a favorable reaction towards short-term high tech acquisitions; (ii) The relationship between the GLICs’ Institutional Block holders (BPSVGLIC) and executive director (FRACEXEC) was found to affect the abnormal returns significantly negatively at a minimum 5% significance level. These results provide two practical implications; firstly, investors gain abnormal returns from their investment in high-tech acquiring companies, and secondly, firms with greater ownership stakes in GLICs could experience value destruction.