What’s really in a deal? Evidence from textual analysis of M&A conference calls
| Autor: | Thomas Shohfi, Runzu Wang, Wenyao Hu |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
040101 forestry
Economics and Econometrics 050208 finance Earnings media_common.quotation_subject 05 social sciences Market reaction Sample (statistics) 04 agricultural and veterinary sciences Payment Information asymmetry 0502 economics and business 0401 agriculture forestry and fisheries Incentive alignment Business Marketing Finance media_common |
| Zdroj: | Review of Financial Economics. 39:500-521 |
| ISSN: | 1873-5924 1058-3300 |
| DOI: | 10.1002/rfe.1126 |
| Popis: | Using a sample of 814 transcripts from 2011 to 2018, we examine information within merger and acquisition conference calls. Textual analysis reveals significant differences between the content of M&A call transcripts and both contemporaneous corporate press releases and prior earnings conference calls. We find participation of target executive types in M&A calls occurs more frequently in diversifying acquisitions and is related to payment choice consistent with promoting managerial sector specific skills and incentive alignment, respectively. Retention of participating target executives is associated with a negative market reaction. We also identify a negative relation between textual sentiment and market reaction consistent with a response to higher levels of information asymmetry. Greater quantitative information, however, is positively related to the market reaction of M&A calls. We develop targeted M&A motive dictionaries to identify financial and strategic content within call transcripts. Consistent with prior literature on merger motivation, deals with more finance (strategy) oriented words have a higher (lower) market reaction. Overall, our results show that deal-related textual analysis explains a highly significant and economically important component of gains/losses to acquirers. |
| Databáze: | OpenAIRE |
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