Abstract
We investigate the extent to which the scheduled release of macroeconomic indicators affects the acquirer’s value in Mergers and Acquisitions (M&As). We find that M&As announced on days of the release of key macroeconomic indicators (i.e. indicator days) realize higher announcement period risk-adjusted returns compared to counterparts announced on non-indicator days. The positive wealth effect is due to the higher market attention on indicator days, which is particularly relevant for smaller M&As that are not usually exposed to significant investor scrutiny. The results hold after addressing self-selection bias concerns. We also find that firms announcing M&As on indicator days are more likely to “listen” to the market’s feedback.
Original language | English |
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Article number | 101583 |
Journal | Journal of Corporate Finance |
Volume | 64 |
Early online date | 8 Feb 2020 |
DOIs | |
Publication status | E-pub ahead of print - 8 Feb 2020 |
Keywords
- buy-and-hold abnormal returns
- investor attention
- macroeconomic indicators
- mergers and acquisitions
- risk-adjusted returns
- small deals