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Earnings Management of Acquiring Firms in Stock-for-Stock Takeovers in the Telecommunications Industry


  • Hyeongjik Lee
  • Seongcheol Kim
  • Changi Nam
  • Seung Hun Han


This article investigates whether acquiring telecommunications firms managed their earnings by means of discretionary accruals prior to the announcement of stock-for-stock takeovers in the U.S. telecommunications industry during the period of 1990 to 2006. The results show that acquiring telecommunications firms manage earnings upward prior to stock-for-stock takeovers. In addition, this article finds that there is a negative short-term wealth effect over the days surrounding stock-for-stock takeover announcements, and there is an inverse relation between earnings management and short-term wealth.

Suggested Citation

  • Hyeongjik Lee & Seongcheol Kim & Changi Nam & Seung Hun Han, 2008. "Earnings Management of Acquiring Firms in Stock-for-Stock Takeovers in the Telecommunications Industry," Journal of Media Economics, Taylor & Francis Journals, vol. 21(4), pages 217-233.
  • Handle: RePEc:taf:jmedec:v:21:y:2008:i:4:p:217-233
    DOI: 10.1080/08997760802541117

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    Cited by:

    1. Kang, Yoolee & Ryu, Min-Ho & Kim, Seongcheol, 2010. "Exploring sustainability management for telecommunications services: A case study of two Korean companies," Journal of World Business, Elsevier, vol. 45(4), pages 415-421, October.

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