Growth Strategies And Value Creation: What Works Best For Stock Exchanges?

In recent years, demutualized stock exchanges have increasingly engaged in M&A and alliance activities. To shed light on this topic, the authors investigate short-run share price responses to the formation of 110 stock exchange M&As and alliances in the period 2000 - 2008. These findings show that the average stock-price responses to a stock-exchange M&A or alliance is positive. Stock exchange M&As create more value than alliances. For alliances, joint ventures generate more value than non-equity alliances. More value is created when the integration is horizontal and cross-border than when it is vertical and domestic.