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Mandatory Financial Disclosure and M&A Activity

Ortiz, M., Peter, C. D., Urzúa, F. ORCID: 0000-0003-4681-7684 & Volpin, P. ORCID: 0000-0002-9287-0972 (2023). Mandatory Financial Disclosure and M&A Activity. The Review of Financial Studies, 36(12), pp. 4788-4823. doi: 10.1093/rfs/hhad052

Abstract

Taking advantage of the implementation of the 2003 European Commission (EC) directive on financial reporting, we explore the impact of mandatory financial disclosure on mergers and acquisitions (M&A). We find robust evidence that the number (and volume) of private firms becoming an M&A target increases with mandatory disclosure. The analyses of cross-industry differences, deal-level data, and post-deal performance indicate that financial disclosure increases M&A activity by reducing information frictions in the market for corporate control.

Publication Type: Article
Additional Information: This is a pre-copyedited, author-produced version of an article accepted for publication in The Review of Financial Studies following peer review. The version of record Ortiz, M., Peter, C. D., Urzúa, F. & Volpin, P. (2023). Mandatory Financial Disclosure and M&A Activity. The Review of Financial Studies, available online at: https://doi.org/10.1093/rfs/hhad052
Publisher Keywords: financial disclosure; mergers and acquisitions; private firms
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
SWORD Depositor:
[thumbnail of Manuscript_20230507.pdf] Text - Accepted Version
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