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Does Speculative News Hurt Productivity? Evidence from Takeover Rumors

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  • Andres, Christian
  • Bazhutov, Dmitry
  • Cumming, Douglas
  • Köchling, Gerrit
  • Limbach, Peter

Abstract

We show that productivity at both the firm and employee (i.e., analyst and inventor) level temporarily declines upon announcements of takeover rumors that do not materialize. Such speculative news may hurt productivity because uncertainty and the threat of job loss cause anxiety, distraction, and reduced commitment among employees and managers. Consistently, we observe a more pronounced productivity dip for rumored targets and when the likelihood of job loss is higher. Firm performance mirrors these results. We find no indication of reverse causality. The evidence fosters our understanding of potential real effects of speculative financial news and the costs of takeover threats.

Suggested Citation

  • Andres, Christian & Bazhutov, Dmitry & Cumming, Douglas & Köchling, Gerrit & Limbach, Peter, 2025. "Does Speculative News Hurt Productivity? Evidence from Takeover Rumors," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 60(6), pages 2952-2996, September.
    • Handle: RePEc:cup:jfinqa:v:60:y:2025:i:6:p:2952-2996_12
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