Journal of Hospitality & Tourism Research

 

Advanced Search

Journal Navigation

Journal Home

Subscriptions

Archive

Contact Us

Table of Contents

Sign In to gain access to subscriptions and/or personal tools.
This Article
Right arrow Full Text (OnlineFirst PDF)
Right arrow All Versions of this Article:
1096348007302350v1
31/4/471    most recent
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to Saved Citations
Right arrow Download to citation manager
Right arrowRequest Permissions
Right arrow Request Reprints
Right arrow Add to My Marked Citations
Citing Articles
Right arrow Citing Articles via Google Scholar
Google Scholar
Right arrow Articles by Hsu, L.-T.
Right arrow Articles by Jang, S.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us   Add to Digg   Add to Reddit   Add to Technorati  
What's this?
First published on July 12, 2007, doi:10.1177/1096348007302350

Journal of Hospitality & Tourism Research 2007;31:471.

A more recent version of this article appeared on November 1, 2007

Article

The Postmerger Financial Performance of Hotel Companies

Li-Tzang (Jane) Hsu1* and SooCheong (Shawn) Jang, Ph.D.2

1 Kansas State University
2 Purdue University

* To whom correspondence should be addressed. E-mail: lth8888{at}ksu.edu.


  Abstract
This study investigates the postmerger financial performance of acquiring firms in the lodging industry between 1985 and 2000. Jensen Measure Model and Market Model are used to examine long-term and short-term market measure of performance. Additionally, return on assets (ROA) and return on equity (ROE) are used to assess the accounting measures for the financial performance of acquiring firms. The results indicate that the shareholders of acquiring hotel companies earned no abnormal equity returns over the short term, which indicates no significant relationship between merger announcement and the change in short-term equity value. As opposed to general expectations, the study reveals that merger has a negative effect on the acquiring firms’ equity values over the long term. Similarly, the ROA and ROE are found to become significantly lower after mergers. Overall, this study provides evidence that shareholders of acquiring hotel companies did not benefit from the mergers.
Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us   Add to Digg Digg   Add to Reddit Reddit   Add to Technorati Technorati    What's this?