Mandatory Financial Disclosure and M&A Activity

Marcelo Ortiz; Caspar David Peter; Francisco Urzúa I.; Paolo F.  Volpin

doi:10.1093/rfs/hhad052

Mandatory Financial Disclosure and M&A Activity

Marcelo Ortiz, Caspar David Peter, Francisco Urzúa I., Paolo F. Volpin^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

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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.

Original language	English
Pages (from-to)	4788-4823
Number of pages	36
Journal	The Review of Financial Studies
Volume	36
Issue number	12
Early online date	2023
DOIs	https://doi.org/10.1093/rfs/hhad052
Publication status	Published - 1 Dec 2023

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© The Author(s) 2023.

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Mandatory Financial Disclosure and M&A Activity

Abstract

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