The role of media in mergers and acquisitions

Rose,Liao1; Xinjie,Wang2; Ge,Wu3

2021-09-01

10.1016/j.intfin.2021.101299

Journal of International Financial Markets Institutions & Money   影响因子和分区

1042-4431

1873-0612

Using a novel dataset of news events for 170,000 entities across over 100 countries, we examine how media sentiment could affect firm acquisition decisions. Studying 77,552 completed merger and acquisition (M&A) deals around the world from 2000 to 2015, we find that firms with high media sentiment are more likely to become an acquirer and to pay a higher deal premium. The effect of media on the likelihood of an acquisition is stronger for cross-border deals, in countries with higher governance standards, larger firms with fewer financial constraints, and firms with higher market-to-book ratio and more media coverage. Target firms typically have low media sentiment. Acquirers with high media sentiment experience significantly positive returns prior to acquisitions and negative returns post-acquisition, inconsistent with theories of media content as a proxy for new information about fundamental asset values. Overall, we show that the media play an important role in the market for M&As. (C) 2021 Elsevier B.V. All rights reserved.

Mergers Media Investor sentiment Governance

SSCI

英语

通讯

Southern University of Science and Technology["Y01246210","Y01246110"]

Business & Economics

Business, Finance ; Economics

WOS:000708244300006

ELSEVIER

Web of Science

1.Department of Finance and Economics, Rutgers University
2.Department of Finance, Southern University of Science and Technology
3.University of Richmond

Rose,Liao,Xinjie,Wang,Ge,Wu. The role of media in mergers and acquisitions[J]. Journal of International Financial Markets Institutions & Money,2021,74:101299.

Rose,Liao,Xinjie,Wang,&Ge,Wu.(2021).The role of media in mergers and acquisitions.Journal of International Financial Markets Institutions & Money,74,101299.

Rose,Liao,et al."The role of media in mergers and acquisitions".Journal of International Financial Markets Institutions & Money 74(2021):101299.