Investor sentiment and M&A withdrawal: International evidence

Fabrice Hervé (), Ibtissem Rouine, Mohamed Firas Thraya () and Mohamed Zouaoui ()
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Fabrice Hervé: CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE], UB - Université de Bourgogne
Ibtissem Rouine: IDRAC Business school Lyon - Institut pour le Développement et la Recherche d'Action Commerciale - Université de Lyon
Mohamed Firas Thraya: IDRAC Business school Lyon - Institut pour le Développement et la Recherche d'Action Commerciale - Université de Lyon
Mohamed Zouaoui: CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]

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Abstract: Successfully achieving an integration strategy with a target depends on various factors. This paper examines how investor sentiment might influence the Merger and Acquisition (M&A) completion process. Using an international sample, the results indicate that a high level of investor sentiment significantly decreases the likelihood of a deal withdrawal and may lead bidders to make non-rational M&A decisions. Furthermore, cultural country factors such as collectivism, uncertainty avoidance, and masculinity accentuate the negative effect of investor sentiment on deal withdrawal, while strong institutions reduce this effect. Our findings are robust to several robustness checks.

Keywords: M&As; Investor sentiment; Deal withdrawal; Cultural dimensions; Institutional factors (search for similar items in EconPapers)
Date: 2024-11
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Published in International Review of Financial Analysis, 2024, 96, pp.103728. ⟨10.1016/j.irfa.2024.103728⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04779943

DOI: 10.1016/j.irfa.2024.103728

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