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    The Role of Target’s Financial Statement Comparability in the Efficiency of Takeover Decisions

    84974.pdf (516.6Kb)
    Access Status
    Open access
    Authors
    Duong, Lien
    Truong, Thu Phuong
    Date
    2021
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Duong, T.H.L. and Truong, T.P. 2021. The Role of Target’s Financial Statement Comparability in the Efficiency of Takeover Decisions. Accounting & Finance. Forthcoming.
    Source Title
    Accounting & Finance
    DOI
    10.1111/acfi.12774
    ISSN
    0810-5391
    Faculty
    Faculty of Business and Law
    School
    School of Accounting, Economics and Finance
    URI
    http://hdl.handle.net/20.500.11937/85091
    Collection
    • Curtin Research Publications
    Abstract

    We investigate whether acquiring firms make more profitable acquisitions when target firms’ financial statements are more comparable with their industry peers. We replicate the original sample of Chen et al. (2018) and extend their sample to the most recent year. We find that acquiring firms experience higher announcement returns, higher acquisition synergies and better post-acquisition operating performance when acquiring targets with higher financial statement comparability. Our results are robust to the newly constructed measure of financial statement comparability, suggesting that comparable accounting information indeed facilitates the efficiency of capital allocation.

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