Using Textual Analysis to Identify Merger Participants: Evidence from the U.S. Banking Industry

13 Pages Posted: 3 Nov 2019

See all articles by Apostolos G. Katsafados

Apostolos G. Katsafados

Athens University of Economics and Business, School of Business, Department of Accounting and Finance, Students

Ion Androutsopoulos

Athens University of Economics and Business

Ilias Chalkidis

Athens University of Economics and Business

Emmanouel Fergadiotis

Athens University of Economics and Business

George N. Leledakis

Athens University of Economics and Business - Department of Accounting and Finance

Emmanouil Pyrgiotakis

Athens University of Economics and Business, School of Business, Department of Accounting and Finance

Date Written: October 23, 2019

Abstract

In this paper, we use the sentiment of annual reports to gauge the likelihood of a bank to participate in a merger transaction. We conduct our analysis on a sample of annual reports of listed U.S. banks over the period 1997 to 2015, using the Loughran and McDonald’s lists of positive and negative words for our textual analysis. We find that a higher frequency of positive (negative) words in a bank’s annual report relates to a higher probability of becoming a bidder (target). Our results remain robust to the inclusion of bank-specific control variables in our logistic regressions.

Keywords: Textual analysis, text sentiment, bank mergers and acquisitions, acquisition likelihood

JEL Classification: G14, G21, G34, G40

Suggested Citation

Katsafados, Apostolos G. and Androutsopoulos, Ion and Chalkidis, Ilias and Fergadiotis, Emmanouel and Leledakis, George N. and Pyrgiotakis, Emmanouil, Using Textual Analysis to Identify Merger Participants: Evidence from the U.S. Banking Industry (October 23, 2019). Available at SSRN: https://ssrn.com/abstract=3474583 or http://dx.doi.org/10.2139/ssrn.3474583

Apostolos G. Katsafados

Athens University of Economics and Business, School of Business, Department of Accounting and Finance, Students ( email )

76 Patission Street
Athens
Greece

Ion Androutsopoulos

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

Ilias Chalkidis

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

Emmanouel Fergadiotis

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

George N. Leledakis (Contact Author)

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece
+30 210 8203 459 (Phone)
+30 210 8228 816 (Fax)

HOME PAGE: http://www.aueb.gr/en/faculty_page/leledakis-georgios

Emmanouil Pyrgiotakis

Athens University of Economics and Business, School of Business, Department of Accounting and Finance ( email )

76 Patission Street
Athens
Greece

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