This study investigates whether firm-specific information about targets improves acquisition efficiency. We define acquisition efficiency as the total surplus generated by an acquisition (Vickrey 1961; Milgrom 1989) and measure it as the difference in the value of the merged firm and the sum of the...

U.S. multinational corporations (MNCs) pay taxes upon repatriation of foreign earnings. This paper investigates whether MNCs facing higher repatriation tax costs are more likely to engage in tax avoidance strategies involving domestic acquisitions. We find that MNCs with higher levels of...

We investigate if timely loss recognition is associated with acquisition-investment decisions. Using a Basu (1997) piece-wise linear regression model, we find that firms with more timely incorporation of economic losses into earnings make more profitable acquisitions, measured by the bidder's...

We investigate if timely loss recognition is associated with acquisition-investment decisions. Using a Basu (1997) piece-wise linear regression model, we find that firms with more timely incorporation of economic losses into earnings make more profitable acquisitions, measured by the bidder's...

Using the introduction of high-speed rail (HSR) as an exogenous shock to costs of information acquisition, we show that reductions in information-acquisition costs lead to (i) a significant increase in information production, evidenced by a higher frequency of analysts visiting portfolio firms,...

Using the introduction of high-speed rail as exogenous shocks to costs of information acquisition, we show that reductions in information-acquisition costs lead to a significant increase in information production and improvement in output quality, evidenced by higher frequency of analysts...

We examine whether tax avoidance of target firms affects takeover pricing. We find that acquirers pay lower premiums to tax aggressive targets, and this effect is concentrated in acquisitions of targets operating in less competitive industries that are prone to managerial agency problems and in...