Pricing media sentiment: Evidence from global mergers and acquisitions
Article
Article Title | Pricing media sentiment: Evidence from global mergers and acquisitions |
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ERA Journal ID | 32913 |
Article Category | Article |
Authors | Shams, Syed, Bose, Sudipta and Sheikhbahaei, Ali |
Journal Title | Pacific-Basin Finance Journal |
Journal Citation | 86 |
Article Number | 102447 |
Number of Pages | 28 |
Year | 2024 |
Publisher | Elsevier |
Place of Publication | Netherlands |
ISSN | 0927-538X |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.pacfin.2024.102447 |
Web Address (URL) | https://www.sciencedirect.com/science/article/pii/S0927538X24001987 |
Abstract | In this study, we examine the association between bidders' media sentiment and the acquisition performance of 5196 domestic mergers and acquisitions across 40 countries from 2000 to 2018. Our results show a causal and positive relationship between media sentiment and the bidders' announcement returns. This supports the investor attention theory, suggesting that investors perceive bidders' media sentiment as informative and value-relevant. Using a dozen major terrorist attacks worldwide as exogenous shocks to business news, we establish a more credible causal link from media sentiment to market reactions. Our results are more pronounced for firms in a higher information asymmetry environment. Additionally, our study finds that higher levels of voice and accountability within a country mitigate the positive impact of media sentiment on bidder returns. We conduct additional robustness tests to further validate these findings and to address possible endogeneity concerns. |
Keywords | Media sentimentAnnouncement returnsDomestic takeover marketCountry governance |
Contains Sensitive Content | Does not contain sensitive content |
ANZSRC Field of Research 2020 | 350208. Investment and risk management |
Public Notes | The accessible file is the accepted version of the paper. Please refer to the URL for the published version. |
Byline Affiliations | School of Business |
University of Newcastle | |
Monash University |
https://research.usq.edu.au/item/z882y/pricing-media-sentiment-evidence-from-global-mergers-and-acquisitions
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