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Using accounting information to identify corporate acquisition motives: Implications on post-acquisition performance

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  • Chen, Bingyi
  • Markelevich, Ariel
  • Wang, Irene Guannan

Abstract

This paper examines the post-acquisition long-term performance of corporate acquisitions using merger motives inferred from ex-ante publicly available accounting information. Using pre-acquisition accounting data, we build an acquisition score (A-Score) that proxies for the net effect of the acquisition motives. We predict and find that the A-Score constructed using pre-acquisition accounting data is positively associated with acquiring firm's post-acquisition performance. The A-Score enables the screening of current and potential corporate acquisitions by predicting the impact on post-acquisition performance. The findings demonstrate the importance of accounting information in inferring merger motives and improve our understanding of the effect of the acquisition motives on post-acquisition performance.

Suggested Citation

  • Chen, Bingyi & Markelevich, Ariel & Wang, Irene Guannan, 2025. "Using accounting information to identify corporate acquisition motives: Implications on post-acquisition performance," Advances in accounting, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:advacc:v:68:y:2025:i:c:s0882611024000385
    DOI: 10.1016/j.adiac.2024.100767
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    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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