Acquisition profitability and firm disclosure

Brett S. Kawada and Ryan K. Peterson

International Journal of Economics and Business Research, 2019, vol. 18, issue 2, 173-185

Abstract: This study examines the association between acquisition profitability and firm disclosure. Using a large sample of acquisitions over the period 1998-2008, this study provides evidence of a positive association between the profitability of acquisitions and firm disclosure prior to the acquisition. Specifically, firms issuing voluntary management earnings forecast more frequently prior to the acquisition announcement are associated with more profitable acquisitions. These findings suggest that disclosure can serve as a monitoring function towards encouraging managers to make corporate investment decisions that increase shareholder value.

Keywords: acquisitions; voluntary disclosure; management earnings forecasts; corporate investment; corporate governance. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:18:y:2019:i:2:p:173-185

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