Using accounting information to identify corporate acquisition motives: Implications on post-acquisition performance

Bingyi Chen, Ariel Markelevich and Irene Guannan Wang

Advances in accounting, 2025, vol. 68, issue C

Abstract: This paper examines the post-acquisition long-term performance of corporate acquisitions using merger motives inferred from ex-ante publicly available accounting information. Using pre-acquisition accounting data, we build an acquisition score (A-Score) that proxies for the net effect of the acquisition motives. We predict and find that the A-Score constructed using pre-acquisition accounting data is positively associated with acquiring firm's post-acquisition performance. The A-Score enables the screening of current and potential corporate acquisitions by predicting the impact on post-acquisition performance. The findings demonstrate the importance of accounting information in inferring merger motives and improve our understanding of the effect of the acquisition motives on post-acquisition performance.

Keywords: Motives for mergers and acquisitions; Post acquisition performance; Accounting information (search for similar items in EconPapers)
JEL-codes: G3 G34 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:68:y:2025:i:c:s0882611024000385

DOI: 10.1016/j.adiac.2024.100767

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