Store of value or speculative investment?Market reaction to corporate announcements of cryptocurrency acquisition

In this study,we analyze the stock market reaction to 35 events associated with 32 publicly traded companies from six countries that have announced cryptocurrency acquisitions,selling,or acceptance as a means of payment.Our analysis focuses on traditional firms whose core business is unrelated to blockchain or cryptocurrency.We find that the aggregate market reaction around these events is slightly positive but statistically insignificant for most event windows.However,when we perform heterogeneity analyses,we observe significant differences in market reaction between events with high(larger CARs)and low cryptocurrency exposure(lower CARs).Multivariate regressions show that the level of exposure to cryptocurrency("skin in the game")is a critical factor underlying abnormal returns around the event.Further analyses reveal that economically meaningful acquisitions of BTC or ETH(relative to firm’s total assets)drive the observed effect.Our findings have important implications for managers,investors,and analysts as they shed light on the relationship between cryptocurrency adoption and firm value.

Economic Policy Uncertainty and Corporate Mergers and Acquisitions

In recent years,the frequent adjustment of the government’s economic policies and the uncertainty of foreign economic situations have made the degree of uncertainty of China’s economic policies rise continuously.The increasing degree of policy uncertainty will inevitably affect the investment and financing decisions of micro enterprises.Then,how does economic policy uncertainty(EPU)affect mergers and acquisitions(M&A)behavior?What’s the mechanism?Based on the above questions,this paper uses the data of non-financial listed companies in the Shanghai and Shenzhen stock exchanges from 2008 to 2018 as a sample to explore the relationship between EPU and M&A.The study shows that rising EPU will promote corporate M&A behavior,and this effect is more significant in slow-growth companies.The relationship between EPU and M&A is affected by corporate governance,stock price volatility and financing constraints.Specifically,the company’s M&A size is more sensitive to EPU with higher level of corporate governance,higher level of stock price volatility,and lesser financing constraints.Further research shows that the rise of EPU will significantly promote the improvement of M&A performance in the short-term,but this effect does not exist in the long-term.Various robustness checks do not change the empirical results of this paper.