Corporate Inversions and Long-Run Performance

This paper investigates the short-term and long-term stock performance of firms that undergo corporate inversions. The results show that the market response to the initial inversion announcement differs based on the type of inversion. Merger & Acquisition (M&A) and restructuring inversions are perceived positively by the market, but naked inversions do not generate a price response. Furthermore, acquirers in inversion-related M&A transactions generate a price premium that is in excess of what is typically generated by acquirers in non-inversion M&A. In the long-run, firms that invert through naked and M&A inversions do not generate significant excess returns above the S&P 500. In contrast, restructured inverted firms generate significant excess returns of 214.53%. Collectively, however, the results suggest that corporate inversion alone is not an indicator of future stock returns.

Name thesis:degree_name

M.Sc. Management

Level thesis:degree_level

Masters

Discipline thesis:degree_discipline

Faculty of Business

Department dc:contributor.department

Faculty of Business Programs

Grantor

Brock University

Year dc:date.issued

2016

Author dc:creator

• Warraich, Hamza

• Corporate Tax
• Corporate Inversion
• Tax Avoidance

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/10464/10434

OAI identifier oai:identifier

oai:brocku.scholaris.ca:10464/10434