Earnings management, lawsuits, and stock-for-stock acquirers' market performance

• 成果类型: Article
• 署名作者: Gong, Guojin; Louis, Henock; Sun, Amy X.
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2008.03.001
• 发表日期: 2008
• 关键词: initial public offerings; UNDERWRITER REPUTATION; CONGLOMERATE MERGERS; firm performance; TOBINS-Q; returns; acquisitions; takeovers; venture; equity

摘要

There is a positive association between stock-for-stock acquirers' pre-merger abnormal accruals and post-merger announcement lawsuits. The market only partially anticipates the effects of post-merger announcement lawsuits at the merger announcement and the post-merger announcement long-term market underperformance is largely limited to litigated acquisitions. Overall, the evidence suggests that it is important that investors not only undo the direct stock price effects of earnings management but also factor the contingent legal costs associated with earnings management. (C) 2008 Elsevier B.V. All rights reserved.