Do Managers Always Listen to the Market? Evidence from Cross-Border M&As and Accounting Quality
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Using cross-border merger and acquisition (M&A) data from 2000 to 2010 across 29 major economies, we investigate the interplay between market signal and information asymmetry in shaping corporate managers’ decision to complete M&As. We gauge the market-evaluated synergies of deals using the abnormal returns of bidders and targets around the news, and information asymmetry based on firm-year level accounting standards quality. Our findings reveal that the corporate managers’ propensity to follow the market signals is positively associated with high-quality accounting standards, suggesting that information transparency plays a crucial role in informing investment decisions.
Abstract
Using cross-border merger and acquisition (M&A) data from 2000 to 2010 across 29 major economies, we investigate the interplay between market signal and information asymmetry in shaping corporate managers’ decision to complete M&As. We gauge the market-evaluated synergies of deals using the abnormal returns of bidders and targets around the news, and information asymmetry based on firm-year level accounting standards quality. Our findings reveal that the corporate managers’ propensity to follow the market signals is positively associated with high-quality accounting standards, suggesting that information transparency plays a crucial role in informing investment decisions.
참고문헌 (23)
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