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Acquisitions and the Information Environment of Firms
Author(s) -
Bhushan Ravi,
Cho Jang Y.
Publication year - 1996
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1996.tb00866.x
Subject(s) - mergers and acquisitions , business , equity (law) , affect (linguistics) , value (mathematics) , monetary economics , enterprise value , industrial organization , accounting , economics , finance , psychology , machine learning , political science , computer science , law , communication
This paper investigates how acquisitions affect analyst following of firms. Analyst following increases as a result of a merger. However, all of that increase can be attributed to the changes in firm‐specific characteristics resulting from the merger. Changes in analyst following around mergers are positively related to changes in firm size, expenditures on R&D, and the ratio of book to the market value of equity. Finally, the relatedness of merger appears to be an important determinant of analyst following of firms engaged in acquisitions.