Title: Acquisition profitability and firm disclosure

Authors: Brett S. Kawada; Ryan K. Peterson

Addresses: San Diego State University, Fowler College of Business, Charles W. Lamden School of Accountancy, San Diego, 92182 California, USA ' University of Central Missouri, Harmon College of Business and Professional Studies, School of Accountancy, Warrensburg, 64093 Missouri, USA

Abstract: This study examines the association between acquisition profitability and firm disclosure. Using a large sample of acquisitions over the period 1998-2008, this study provides evidence of a positive association between the profitability of acquisitions and firm disclosure prior to the acquisition. Specifically, firms issuing voluntary management earnings forecast more frequently prior to the acquisition announcement are associated with more profitable acquisitions. These findings suggest that disclosure can serve as a monitoring function towards encouraging managers to make corporate investment decisions that increase shareholder value.

Keywords: acquisitions; voluntary disclosure; management earnings forecasts; corporate investment; corporate governance.

DOI: 10.1504/IJEBR.2019.101310

International Journal of Economics and Business Research, 2019 Vol.18 No.2, pp.173 - 185

Received: 13 Mar 2018
Accepted: 08 Aug 2018

Published online: 31 Jul 2019 *

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