Does Target Firm’s Earnings Management Affect Shareholder’s Gains? Evidence from China
This study tests the hypothesis that the target firms are involved in earnings management activities in quarters leading to a takeover announcement. Using a sample of 3,455 Chinese listed firms that are targets of successful acquisitions over the period 2007–2020, and for a matched sample of non-targets, we find that target firms manipulate earnings in quarters leading to the announcement date. Further, we find evidence of a negative relationship between earnings management and short-term gains to shareholders. Our result remains robust after controlling for various deal characteristics. The study also suggests that pre-merger earnings management in target firms is not fully anticipated by the market before the takeover announcement. We find no evidence of earnings management immediately after the announcement quarter.
- Standort
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Deutsche Nationalbibliothek Frankfurt am Main
- Umfang
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Online-Ressource
- Sprache
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Englisch
- Erschienen in
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Does Target Firm’s Earnings Management Affect Shareholder’s Gains? Evidence from China ; volume:55 ; number:2 ; year:2022 ; pages:203-226
Credit and capital markets ; 55, Heft 2 (2022), 203-226
- Urheber
- DOI
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10.3790/ccm.55.2.203
- URN
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urn:nbn:de:101:1-2022101115435132505699
- Rechteinformation
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Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
- Letzte Aktualisierung
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15.08.2025, 07:25 MESZ
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Beteiligte
- Mughal, Azhar
- Haque, Abdul
- Zahid, Zohaib
- Ali, Furman
- Li, Zheng
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