The spillover effect of financial information in mergers and acquisitions |
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| Institution: | 1. Management School, Jinan University, Guangzhou, China;2. Business School, University of Queensland, Australia;3. Center for Accounting, Finance and Institution, Business School, Sun Yat-sen University, Guangzhou, China;1. School of Finance, Nankai University, Tianjin, China;2. Department of Finance and Economics, School of Business, Rutgers University, Janice H. Levin Building, Rockefeller Rd., Piscataway, NJ, 08854, USA;3. Providence University and PAIR Labs, Taiwan;1. Shenzhen Audencia Business School, Shenzhen University, Shenzhen, 518060, China;2. Audencia Business School, Nantes, 44300, France;3. Department of Finance, Strome College of Business, Old Dominion University, Norfolk, VA, 23529, USA;4. Department of Accounting, College of Business, San Francisco State University, San Francisco, CA, 94132, USA;1. Manchester Accounting and Finance Group, University of Manchester, Booth Street West, Manchester M15 6PB, UK;2. Business School, University College Cork, College Road, Cork, Ireland;3. Accounting and Finance Group, Leeds Business School, Leeds University, LS2 9JT, UK;1. Manchester Metropolitan University Business School, Department of Accounting, Finance and Banking, Manchester, M15 6BH, United Kingdom;2. Lancaster University Management School, Department of Accounting and Finance, Lancaster, LA1 4YX, United Kingdom;1. Monash Business School, Monash University, Level 7, 271 Collins Street, Melbourne, 3000, Australia;2. La Trobe Business School, La Trobe University, 1 Kingsbury Drive, Bundoora, Melbourne, 3086, Australia;3. Department of Accounting, Monash University, 900 Dandenong Road, Caulfield East, Melbourne, 3145, Australia |
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| Abstract: | In this study we investigate whether and how a firm's investment activities are affected by the financial information of peer firms on merger and acquisition (M&A) efficiency. Using changes in M&A accounting performance to measure efficiency, we find a positive association between the post-M&A accounting performance of an acquiring firm and that of previous peer acquirers. We show that this spillover effect is derived from peer firms with improved rather than poorer post-M&A accounting performance. We also find that the spillover effect varies with the characteristics of both the acquiring and the peer firms. The effect is stronger when the peer firms are larger, are non-SOEs (vs. SOEs), have improved accounting performance after M&As and undertake M&As with unrelated (vs. related) entities, and when the acquiring firms are smaller, non-SOEs (vs. SOEs) and have poorer accounting performance before M&As. |
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| Keywords: | Spillover effect M&As Financial information M41 G34 |
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