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The JOBS Act and mergers and acquisitions

Author

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  • Chu, Yongqiang
  • Liu, Ming
  • Zhang, Shu

Abstract

We examine how the Jumpstart Our Business Startup Act (JOBS Act) affects mergers and acquisitions. We find that U.S. private targets are valued higher after the JOBS Act relative to public targets acquired by U.S. acquirers. The announcement returns of acquirers who acquired U.S. private targets after the JOBS Act are lower. The effect concentrates on private targets that are unlikely to qualify as small reporting companies should they choose to go public. We also show that the results are unlikely to be driven by changes in deal synergy.

Suggested Citation

  • Chu, Yongqiang & Liu, Ming & Zhang, Shu, 2022. "The JOBS Act and mergers and acquisitions," Journal of Corporate Finance, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:corfin:v:72:y:2022:i:c:s0929119921002753
    DOI: 10.1016/j.jcorpfin.2021.102153
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    References listed on IDEAS

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    Cited by:

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    2. Massimo G. Colombo & Benedetta Montanaro & Silvio Vismara, 2023. "What drives the valuation of entrepreneurial ventures? A map to navigate the literature and research directions," Small Business Economics, Springer, vol. 61(1), pages 59-84, June.

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    More about this item

    Keywords

    JOBS Act; Private target; Bargaining power; IPO; Disclosure cost;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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