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Abstract
Purpose –The present research investigates the predictive power of investors’ attention within the M&As context and examine whether the investor attention provides valuable information regarding the outcome of the deals.
Design/methodology/approach – To test our hypotheses, we employ a survival analysis methodology and perform a Cox proportional hazard model (CPH), including the Google’s internet Search Volume Index (SVI) as proxy for investors’ attention along with additional factors that might affect the outcome of the deals.
Findings - Our results demonstrate that the completion hazard rate is positively correlated with the Investor attention, and therefore it highlights that the Investor “active“ attention clusters around M&As that display a higher probability of success.
Research limitations/implications – Our paper is still in the developmental phase, therefore, some amount of empirical investigation is required, regarding the analysis of a potential relationship between Investor Attention (SVI) and M&A premium. Additionally, our analysis aims to offer a comprehensive view of the role played by media coverage in this matter. As merger arbitrage managers make investment profits when they successfully anticipate the outcome of announced M&As, our results provide relevant information to address their investment strategy.
Originality/value – This paper sheds new light on the ability of investors’ attention to predict the outcome of company events, such as M&A.
Short Bio
Eleonora Monaco is Senior Assistant Professor of Accounting at the Department of Management of the University of Bologna. In addition, she is Invited Assistant Professor of Accounting & Finance at the Católica Porto Business School, where she previously worked as faculty member. She holds a PhD in Management at the University of Chieti-Pescara and she worked as a Postdoctoral Research Fellow in Accounting & Capital Markets at the Capital Markets Cooperative Research Centre in Sydney (Australia) in a joint project with the University of Chieti-Pescara. She has been a visiting scholar at the University of Edinburgh Business School (UK) and Queensland University of Technology in Brisbane (Australia).
Since the establishment of the European Capital Markets Cooperative Research Centre, Eleonora has held the role of Liaison Officer, currently she is the Continental Network Officer of the British Academy of Management for the Financial Management Group of Interest.
Her main research interests include both Capital Market-based research in Accounting, Narrative Accounting, Mergers & Acquisitions and Earnings Management.
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