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Lookup NU author(s): Dr Xuejun JiangORCiD
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This study examines the impact of local political corruption on investors’ evaluation of firms’ mergers and acquisitions (M&As) in the US. Using the number of corruption convictions of government officials reported by the US Department of Justice, we find that acquirers in more corrupt court districts experience lower acquirer announcement returns, lower combined acquirer and target announcement returns, and are less likely to complete acquisitions. We further find that the relation between local political corruption and acquirer announcement returns is worsened when acquirers operate primarily in the headquarters state. Overall, the results suggest that local political corruption has an adverse impact on investors’ evaluation of a firm’s M&A profitability. https://doi.org/10.1111/acfi.12596
Author(s): Jiang X, Lu L
Publication type: Article
Publication status: Published
Journal: Accounting & Finance
Year: 2021
Volume: 61
Issue: 1
Pages: 885-912
Print publication date: 01/03/2021
Online publication date: 08/01/2020
Acceptance date: 01/01/2020
ISSN (print): 0810-5391
ISSN (electronic): 1467-629X
Publisher: John Wiley & Sons, Inc.
URL: https://doi.org/10.1111/acfi.12596
DOI: 10.1111/acfi.12596
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