Competitor risk disclosure and firm M&A activities: evidence from textual analysis

Kezhi Liao, Zhihao Wang and Baichao Ma

Applied Economics Letters, 2025, vol. 32, issue 15, 2109-2115

Abstract: This paper investigates the impact of competitor risk disclosure on M&A activities of Chinese firms. By analysing 32,364 firm-year observations over 2007–2021, we find that competitor risk disclosure reduces the likelihood, frequency, and size of corporate M&A activities. Our findings withstand a series of endogeneity and robustness tests. Additionally, the increase of debt financing costs is the path through which competitor risk disclosure affects firms’ M&A activities. Further analyses show that financing constraints and non-state ownership amplify the impact of competitor risk disclosure on firms’ M&A activities. These findings enrich the literature on the economic consequences of competitor qualitative disclosure.

Date: 2025
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DOI: 10.1080/13504851.2024.2332543

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