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Mandatory Financial Disclosure and M&A Activity

Author

Listed:
  • Marcelo Ortiz
  • Caspar David Peter
  • Francisco Urzúa
  • Paolo F
  • Itay Goldstein

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. 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.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online

Suggested Citation

  • Marcelo Ortiz & Caspar David Peter & Francisco Urzúa & Paolo F & Itay Goldstein, 2023. "Mandatory Financial Disclosure and M&A Activity," The Review of Financial Studies, Society for Financial Studies, vol. 36(12), pages 4788-4823.
    • Handle: RePEc:oup:rfinst:v:36:y:2023:i:12:p:4788-4823.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhad052
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    More about this item

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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