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Acquisition profitability and firm disclosure

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  • Brett S. Kawada
  • Ryan K. Peterson

Abstract

This study examines the association between acquisition profitability and firm disclosure. Using a large sample of acquisitions over the period 1998-2008, this study provides evidence of a positive association between the profitability of acquisitions and firm disclosure prior to the acquisition. Specifically, firms issuing voluntary management earnings forecast more frequently prior to the acquisition announcement are associated with more profitable acquisitions. These findings suggest that disclosure can serve as a monitoring function towards encouraging managers to make corporate investment decisions that increase shareholder value.

Suggested Citation

  • Brett S. Kawada & Ryan K. Peterson, 2019. "Acquisition profitability and firm disclosure," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 18(2), pages 173-185.
  • Handle: RePEc:ids:ijecbr:v:18:y:2019:i:2:p:173-185
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