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Richard Roll
University of California, Los Angeles
The Hubris Hypothesis of Corporate Takeovers*
Finally, knowledge of the source of takeover gains still eludes us. [Jensen and Ruback 1983, p. 47]
I. Introduction
Despite many excellent research papers, we still do not fully understandthe motives behindmergers and tender offers or whether they bring an increase in aggregatemarketvalue. In their comprehensive review article (from which the
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