Definition of variables
| Dependent variables | Definition of variables |
| CAR and BHAR | The cumulative abnormal returns and the buy and hold abnormal returns of the acquirer or newly merged firm after the deal |
| ROA | The earnings before interest, taxes, depreciation and amortization (EBITDA) divided by total assets |
| Information asymmetry: partitioning variables | |
| Accruals quality | Accruals quality calculated following Dechow and Dichev (2002), Kim and Qi (2010) |
| Size of the target | The log of total assets of the target firm |
| Target Tobin’s Q | Tobin’s Q of the target firm. Tobin’s Q is defined as the ratio of total assets plus market capitalization minus common equity minus deferred taxes and investment tax credit to total assets |
| Independent variable | |
| Time until completion | The time difference between the announcement and effective date of the deal in months |
| Control variables | |
| Cash payment | A dummy variable equal to one if the deal is financed by all or majority cash and zero otherwise |
| Industry difference | A dummy variable that equals one if the acquirer and target firms belong to different industries, and zero otherwise |
| GDP growth | The annual GDP growth rate of the target countries |
| Total stock traded growth | The calculated annual growth of the total stock market value of the target countries |
| Value of transaction | The log of the total value of the consideration paid by the acquirer, excluding fees and expenses |
| Ownership percentage | The percentage ownership of the acquirer after the deal |
| Acquirer size | The log of total assets of the acquirer firm |
| Acquirer cash flow | The cash flow of the acquirer firm divided by its total assets |
| Acquirer leverage | The total liabilities of the acquirer firm divided by its total assets |
| Acquirer Tobin’s Q | The Tobin’s Q of the acquirer firm. Tobin’s Q is defined as the ratio of total assets plus market capitalization minus common equity minus deferred taxes and investment tax credit to total assets |
| CAR and BHAR | The cumulative abnormal returns and the buy and hold abnormal returns of the acquirer or newly merged firm after the deal |
| ROA | The earnings before interest, taxes, depreciation and amortization (EBITDA) divided by total assets |
| Accruals quality | Accruals quality calculated following |
| Size of the target | The log of total assets of the target firm |
| Target Tobin’s Q | Tobin’s Q of the target firm. Tobin’s Q is defined as the ratio of total assets plus market capitalization minus common equity minus deferred taxes and investment tax credit to total assets |
| Time until completion | The time difference between the announcement and effective date of the deal in months |
| Cash payment | A dummy variable equal to one if the deal is financed by all or majority cash and zero otherwise |
| Industry difference | A dummy variable that equals one if the acquirer and target firms belong to different industries, and zero otherwise |
| GDP growth | The annual GDP growth rate of the target countries |
| Total stock traded growth | The calculated annual growth of the total stock market value of the target countries |
| Value of transaction | The log of the total value of the consideration paid by the acquirer, excluding fees and expenses |
| Ownership percentage | The percentage ownership of the acquirer after the deal |
| Acquirer size | The log of total assets of the acquirer firm |
| Acquirer cash flow | The cash flow of the acquirer firm divided by its total assets |
| Acquirer leverage | The total liabilities of the acquirer firm divided by its total assets |
| Acquirer Tobin’s Q | The Tobin’s Q of the acquirer firm. Tobin’s Q is defined as the ratio of total assets plus market capitalization minus common equity minus deferred taxes and investment tax credit to total assets |
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