Journal article
Do Stock Analysts Influence Merger Completion? An Examination of Postmerger Announcement Recommendations
Management science, v 61(10), pp 2430-2448
01 Oct 2015
Abstract
This paper investigates the effects of analyst recommendations issued after a merger announcement on deal completion. We find the probability of completion increases (decreases) with the favorability of acquirer (target) recommendations. Results from instrumental variables tests support causality running from recommendations to merger outcomes. Additional tests suggest that these relations are driven by target shareholders reassessing the merger offer in response to movements in acquirer and target valuations. We also find that favorably recommended firms in a proposed merger underperform following deal resolution, suggesting that investors overreact to postmerger announcement recommendations.
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Details
- Title
- Do Stock Analysts Influence Merger Completion? An Examination of Postmerger Announcement Recommendations
- Creators
- David A. Becher - Drexel UniversityJonathan B. Cohn - The University of Texas at AustinJennifer L. Juergens - Drexel University
- Publication Details
- Management science, v 61(10), pp 2430-2448
- Publisher
- Informs
- Number of pages
- 19
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000362532900009
- Scopus ID
- 2-s2.0-84943576826
- Other Identifier
- 991019168134404721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Management
- Operations Research & Management Science