Mandatory Financial Disclosure and M&A Activity

Forthcoming Review of Financial Studies

83 Pages Posted: 11 Mar 2021 Last revised: 12 Jun 2023

See all articles by Marcelo Ortiz M.

Marcelo Ortiz M.

Universitat Pompeu Fabra; Universitat Pompeu Fabra - Barcelona School of Management; Barcelona School of Economics

Caspar David Peter

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Francisco Urzúa I.

City University London - Bayes Business School

Paolo F. Volpin

Drexel University - Bennett S. LeBow College of Business; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); City University London - Faculty of Finance

Date Written: June 12, 2023

Abstract

Taking advantage of the implementation of the 2003 European Commission (EC) directive on financial reporting, we explore the impact of mandatory financial disclosure on mergers and acquisitions (M&A). We find robust evidence that the number (and volume) of private firms becoming an M&A target increases with mandatory disclosure. The analyses of cross-industry differences, deal-level data, and post-deal performance indicate that financial disclosure increases M&A activity by reducing information frictions in the market for corporate control.

Keywords: Financial disclosure; mergers and acquisitions; private firms

JEL Classification: G34, G14

Suggested Citation

Ortiz M., Marcelo and Peter, Caspar David and Urzua, Francisco and Volpin, Paolo F., Mandatory Financial Disclosure and M&A Activity (June 12, 2023). Forthcoming Review of Financial Studies, Available at SSRN: https://ssrn.com/abstract=3768349 or http://dx.doi.org/10.2139/ssrn.3768349

Marcelo Ortiz M.

Universitat Pompeu Fabra ( email )

Barcelona
Spain

HOME PAGE: http://www.marceloortizm.com

Universitat Pompeu Fabra - Barcelona School of Management ( email )

Barcelona, 08005
Spain

Barcelona School of Economics ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Caspar David Peter

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T10-49
3062 PA Rotterdam, 3062 PA
Netherlands

HOME PAGE: http://www.rsm.nl/people/caspar-david-peter/

Francisco Urzua (Contact Author)

City University London - Bayes Business School ( email )

United Kingdom

Paolo F. Volpin

Drexel University - Bennett S. LeBow College of Business ( email )

101 N. 33rd St.
Philadelphia, PA 19104
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http:/www.ecgi.org

City University London - Faculty of Finance ( email )

London, EC2Y 8HB
Great Britain

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