Do Managers Always Listen to the Market? Evidence from Cross-Border M&As and Accounting Quality
- Resource Type
- Article
- Authors
- 홍은석; 신종국
- Source
- 경제연구, 41(2), pp.99-117 May, 2023
- Subject
- 경제학
- Language
- English
- ISSN
- 1598-8260
Using cross-border merger and acquisition (M&A) data from 2000 to 2010 across 29 major economies, we investigate the interplay between market signal and information asymmetry in shaping corporate managers’ decision to complete M&As. We gauge the market-evaluated synergies of deals using the abnormal returns of bidders and targets around the news, and information asymmetry based on firm-year level accounting standards quality. Our findings reveal that the corporate managers’ propensity to follow the market signals is positively associated with high-quality accounting standards, suggesting that information transparency plays a crucial role in informing investment decisions.