The impact of weather-induced moods on M&A performance

Abongeh A. Tunyi and Michael Machokoto

Economics Letters, 2021, vol. 207, issue C

Abstract: Unpleasant weather induces negative moods and, consequently, increases managerial risk aversion. We conjecture that this weather-induced risk aversion leads to better M&A performance by constraining managerial hubris, over-confidence and over-payment for targets. Using a large UK sample, we document robust and significant heterogeneity in M&A performance conditional on the weather. Specifically, UK acquirers earn significant positive CARs from deals announced in unpleasant weather but negative CARs otherwise.

Keywords: M&A; Acquirers; Weather; Moods; Risk aversion; United Kingdom (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:207:y:2021:i:c:s0165176521002883

DOI: 10.1016/j.econlet.2021.110011

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