Acquiring firms’ transparency and their returns around M&A announcements: Evidence from China

Rita W.Y. Yip, Danqing Young, Beibei Liu and Zhichen Wang

Journal of International Accounting, Auditing and Taxation, 2022, vol. 48, issue C

Abstract: This study empirically examines the effects of the information transparency of acquiring firms on their stock returns around merger and acquisition (M&A) announcements in China. We find that acquiring firms’ information transparency is positively associated with their returns within M&A announcement windows. Our cross-sectional analyses show that such associations are more significant for acquiring firms from regions with an underdeveloped market institution, with lower institutional investor shareholdings, and that are state-owned, suggesting that acquiring firms’ information transparency is a critical determinant of perceived M&A benefits in environments with severe agency problems. We expect our results to be relevant to other emerging markets with institutional characteristics similar to those of China, such as significant agency problems and weak investor protection.

Keywords: Financial markets; Institutional environment; Market institutions; Transparency; M&A; China (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1061951822000428
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:48:y:2022:i:c:s1061951822000428

DOI: 10.1016/j.intaccaudtax.2022.100487

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().