J. Harold Mulherin

Bio: J. Harold Mulherin is an academic researcher from University of Georgia. The author has contributed to research in topics: Common value auction & Stock exchange. The author has an hindex of 31, co-authored 66 publications receiving 6266 citations. Previous affiliations of J. Harold Mulherin include Clemson University & Terry College of Business.

The Impact of Public Information on the Stock Market

Abstract: We study the relation between the number of news announcements reported daily by Dow Jones & Company and aggregate measures of securities market activity including trading volume and market returns. We find that the number of Dow Jones announcements and market activity are directly related and that the results are robust to the addition of factors previously found to influence financial markets such as day-of-the-week dummy variables, news importance as proxied by large New York Times headlines and major macroeconomic announcements, and non-information sources of market activity as measured by dividend capture and triple witching trading. However, the observed relation between news and market activity is not particularly strong and the patterns in news announcements do not explain the day-of-the-week seasonalities in market activity. Our analysis of the Dow Jones database confirms the difficulty of linking volume and volatility to observed measures of information.

How Are Firms Sold

Abstract: As measured by the number of bidders that publicly attempt to acquire a target, the takeover arena in the 1990s was not competitive. However, we develop a new measure competition based on the pre-public, private takeover process that indicates that public takeover activity is only the tip of the iceberg of actual takeover competition during the 1990s. We show a highly competitive market where half of the targets were auctioned among multiple bidders, while the remainder negotiated with a single bidder. In event study analysis, we find that the wealth effects for target shareholders are comparable in auctions and negotiations.

How Are Firms Sold

Abstract: As measured by the number of bidders that publicly attempt to acquire a target, the takeover arena in the 1990s appears noncompetitive. However, we provide novel data on the pre-public, private takeover process that indicates that public takeover activity is only the tip of the iceberg of actual takeover competition during the 1990s. We show a highly competitive market where half of the targets are auctioned among multiple bidders, while the remainder negotiate with a single bidder. In event study analysis, we find that the wealth effects for target shareholders are comparable in auctions and negotiations. THE TRADITIONAL MEASURE OF COMPETITION in a corporate takeover is the number of bidders that publicly attempt to acquire the target. Using this measure, many notable researchers report that the takeover market during the 1990s was not very competitive. For instance, Andrade, Mitchell, and Stafford (2001) describe the prototypical takeover in the 1990s as a friendly transaction with only one bidding firm. Similarly, Schwert (2000) reports that the 1990s witnessed far fewer public takeover auctions than previous time periods, and argues that this was due to the growing use of poison pills and the imposition of state antitakeover laws. More recent research such as Hartzell, Ofek, and Yermack (2004), Moeller (2005), and Wulf (2004) suggests that target managers used their growing bargaining power in the 1990s to negotiate sweet deals for themselves at the expense of their shareholders. In this paper, we present a new measure of takeover competition that indicates that the takeover market during the 1990s was actually quite competitive. Using data from SEC merger documents, we provide a novel depiction of the method by which firms are sold and we demonstrate the existence of an active takeover market that takes place prior to the public announcement of takeover deals. For a sample of 400 takeovers from the 1990s representing over $1 trillion

Economics of Information

Abstract: The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

From State to Market: A Survey of Empirical Studies on Privatization

Abstract: This study surveys the literature examining the privatization of state-owned enterprises (SOEs) We review the history of privatization, the theoretical and empirical evidence on the relative performance of state owned and privately owned firms, the types of privatization, if and by how much privatization has improved the performance of former SOEs in non-transition and transition countries, how investors in privatizations have fared, and the impact of privatization on the development of capital markets and corporate governance. In most settings privatization "works" in that the firms become more efficient, more profitable, and financially healthier, and reward investors.

New Evidence and Perspectives on Mergers

Abstract: As in previous decades, merger activity clusters by industry during the 1990s. One particular kind of industry shock, deregulation, becomes a dominant factor, accountings for nearly half of the merger activity since the late 1980s. In contrast to the 1980s, mergers in the 1990s are mostly stock swaps, and hostile takeovers virtually disappear. Over our 1973 to 1998 sample period, the announcement-period stock market response to mergers is positive for the combined merging parties, suggesting that mergers create value on behalf of shareholders. Consistent with that, we find evidence of improved operating performance following mergers, relative to industry peers.