The accounting choice issue and the M&A activity

• Author(s): Ribeiro, Humberto
• Date: 2008
• Persistent ID: http://hdl.handle.net/10198/8315
• Origin: Biblioteca Digital do IPB
• Subject(s): Time series; M&A determinants
• Document Type: Conference Object
• Language: English

Description

EFM classification: 710, 160, 200 This study addresses the issue of the accounting choice as a possible determinant of mergers & acquisitions (M&A) activity. The accounting choice has value implications, and managerial discretion can be used to meet financial reporting objectives (see e.g. Watts & Zimmerman, 1990). On the other hand, despite the existence of a wide empirical and theoretical research, the literature still lacks a convincing overall theory concerning M&A occurrence. Nevertheless, the overall evidence suggests that some macroeconomic variables are associated with the timing of M&A. This paper studies whether accounting choice developments can affect M&A activity together with macroeconomic, time, and several M&A endogenous variables. The findings show a significant positive relationship between M&A activity and stock market prices, and also several significant associations between M&A and other endogenous and exogenous explanatory variables, but no relationship between accounting choice and M&A activity.