No Cover Image

Journal article 322 views 86 downloads

Takeover Vulnerability and Pre-Emptive Earnings Management

Tunyi Tunyi Abongeh, Junhong Yang Orcid Logo, Henry Agyei-Boapeah Orcid Logo, Michael Machokoto Orcid Logo

European Accounting Review, Volume: 33, Issue: 2, Pages: 677 - 711

Swansea University Author: Tunyi Tunyi Abongeh

  • 65018.VOR.pdf

    PDF | Version of Record

    © 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Distributed under the terms of a Creative Commons Attribution 4.0 International License (CC BY 4.0).

    Download (988.15KB)

Check full text

DOI (Published version): 10.1080/09638180.2022.2116064

Abstract

We explore whether firms that are vulnerable to takeovers pre-emptively manage earnings in anticipation of such events. We find a positive relationship between firms' vulnerability to takeovers and their propensity to manage earnings, mainly through the manipulation of real activities. We consi...

Full description

Published in: European Accounting Review
ISSN: 0963-8180 1468-4497
Published: Informa UK Limited 2024
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa65018
Tags: Add Tag
No Tags, Be the first to tag this record!
first_indexed 2023-11-20T17:08:43Z
last_indexed 2023-11-20T17:08:43Z
id cronfa65018
recordtype SURis
fullrecord <?xml version="1.0" encoding="utf-8"?><rfc1807 xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xsd="http://www.w3.org/2001/XMLSchema"><bib-version>v2</bib-version><id>65018</id><entry>2023-11-20</entry><title>Takeover Vulnerability and Pre-Emptive Earnings Management</title><swanseaauthors><author><sid>eefe2792c8eed5b49feede33981dfa53</sid><firstname>Tunyi</firstname><surname>Tunyi Abongeh</surname><name>Tunyi Tunyi Abongeh</name><active>true</active><ethesisStudent>false</ethesisStudent></author></swanseaauthors><date>2023-11-20</date><deptcode>BAF</deptcode><abstract>We explore whether firms that are vulnerable to takeovers pre-emptively manage earnings in anticipation of such events. We find a positive relationship between firms' vulnerability to takeovers and their propensity to manage earnings, mainly through the manipulation of real activities. We consider two motivations for firms' pre-emptive earnings management behavior; (1) to deter future takeovers and (2) to optimize M&amp;A outcomes. Concerning the former, we document evidence consistent with entrenched managers using real earnings management to deter or delay future takeovers. Concerning the latter, we find evidence suggesting that, contingent on receiving takeover bids, vulnerable firms that pre-emptively manipulate real activities extract comparatively higher merger premiums. Overall, our findings suggest that managers of vulnerable firms pre-emptively manage earnings to purposefully delay the timing and optimize the outcomes of prospective takeovers.</abstract><type>Journal Article</type><journal>European Accounting Review</journal><volume>33</volume><journalNumber>2</journalNumber><paginationStart>677</paginationStart><paginationEnd>711</paginationEnd><publisher>Informa UK Limited</publisher><placeOfPublication/><isbnPrint/><isbnElectronic/><issnPrint>0963-8180</issnPrint><issnElectronic>1468-4497</issnElectronic><keywords>Takeovers, Takeover vulnerability, Earnings management, Takeover deterrent, Merger premiums</keywords><publishedDay>14</publishedDay><publishedMonth>3</publishedMonth><publishedYear>2024</publishedYear><publishedDate>2024-03-14</publishedDate><doi>10.1080/09638180.2022.2116064</doi><url/><notes/><college>COLLEGE NANME</college><department>Accounting and Finance</department><CollegeCode>COLLEGE CODE</CollegeCode><DepartmentCode>BAF</DepartmentCode><institution>Swansea University</institution><apcterm>Another institution paid the OA fee</apcterm><funders>We acknowledge financial support from the University of Sheffield (CRAFiC).</funders><projectreference/><lastEdited>2024-04-10T10:49:33.1121443</lastEdited><Created>2023-11-20T17:03:32.3574872</Created><path><level id="1">Faculty of Humanities and Social Sciences</level><level id="2">School of Management - Accounting and Finance</level></path><authors><author><firstname>Tunyi</firstname><surname>Tunyi Abongeh</surname><order>1</order></author><author><firstname>Junhong</firstname><surname>Yang</surname><orcid>0000-0002-4509-1263</orcid><order>2</order></author><author><firstname>Henry</firstname><surname>Agyei-Boapeah</surname><orcid>0000-0003-4798-6324</orcid><order>3</order></author><author><firstname>Michael</firstname><surname>Machokoto</surname><orcid>0000-0001-8903-0019</orcid><order>4</order></author></authors><documents><document><filename>65018__29339__337f2ddd096947718c5c3cce08c4a124.pdf</filename><originalFilename>65018.VOR.pdf</originalFilename><uploaded>2024-01-02T14:44:06.4322327</uploaded><type>Output</type><contentLength>1011869</contentLength><contentType>application/pdf</contentType><version>Version of Record</version><cronfaStatus>true</cronfaStatus><documentNotes>© 2022 The Author(s). Published by Informa UK Limited, trading as Taylor &amp; Francis Group. Distributed under the terms of a Creative Commons Attribution 4.0 International License (CC BY 4.0).</documentNotes><copyrightCorrect>true</copyrightCorrect><language>eng</language><licence>https://creativecommons.org/licenses/by/4.0/</licence></document></documents><OutputDurs/></rfc1807>
spelling v2 65018 2023-11-20 Takeover Vulnerability and Pre-Emptive Earnings Management eefe2792c8eed5b49feede33981dfa53 Tunyi Tunyi Abongeh Tunyi Tunyi Abongeh true false 2023-11-20 BAF We explore whether firms that are vulnerable to takeovers pre-emptively manage earnings in anticipation of such events. We find a positive relationship between firms' vulnerability to takeovers and their propensity to manage earnings, mainly through the manipulation of real activities. We consider two motivations for firms' pre-emptive earnings management behavior; (1) to deter future takeovers and (2) to optimize M&A outcomes. Concerning the former, we document evidence consistent with entrenched managers using real earnings management to deter or delay future takeovers. Concerning the latter, we find evidence suggesting that, contingent on receiving takeover bids, vulnerable firms that pre-emptively manipulate real activities extract comparatively higher merger premiums. Overall, our findings suggest that managers of vulnerable firms pre-emptively manage earnings to purposefully delay the timing and optimize the outcomes of prospective takeovers. Journal Article European Accounting Review 33 2 677 711 Informa UK Limited 0963-8180 1468-4497 Takeovers, Takeover vulnerability, Earnings management, Takeover deterrent, Merger premiums 14 3 2024 2024-03-14 10.1080/09638180.2022.2116064 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University Another institution paid the OA fee We acknowledge financial support from the University of Sheffield (CRAFiC). 2024-04-10T10:49:33.1121443 2023-11-20T17:03:32.3574872 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Tunyi Tunyi Abongeh 1 Junhong Yang 0000-0002-4509-1263 2 Henry Agyei-Boapeah 0000-0003-4798-6324 3 Michael Machokoto 0000-0001-8903-0019 4 65018__29339__337f2ddd096947718c5c3cce08c4a124.pdf 65018.VOR.pdf 2024-01-02T14:44:06.4322327 Output 1011869 application/pdf Version of Record true © 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Distributed under the terms of a Creative Commons Attribution 4.0 International License (CC BY 4.0). true eng https://creativecommons.org/licenses/by/4.0/
title Takeover Vulnerability and Pre-Emptive Earnings Management
spellingShingle Takeover Vulnerability and Pre-Emptive Earnings Management
Tunyi Tunyi Abongeh
title_short Takeover Vulnerability and Pre-Emptive Earnings Management
title_full Takeover Vulnerability and Pre-Emptive Earnings Management
title_fullStr Takeover Vulnerability and Pre-Emptive Earnings Management
title_full_unstemmed Takeover Vulnerability and Pre-Emptive Earnings Management
title_sort Takeover Vulnerability and Pre-Emptive Earnings Management
author_id_str_mv eefe2792c8eed5b49feede33981dfa53
author_id_fullname_str_mv eefe2792c8eed5b49feede33981dfa53_***_Tunyi Tunyi Abongeh
author Tunyi Tunyi Abongeh
author2 Tunyi Tunyi Abongeh
Junhong Yang
Henry Agyei-Boapeah
Michael Machokoto
format Journal article
container_title European Accounting Review
container_volume 33
container_issue 2
container_start_page 677
publishDate 2024
institution Swansea University
issn 0963-8180
1468-4497
doi_str_mv 10.1080/09638180.2022.2116064
publisher Informa UK Limited
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
active_str 0
description We explore whether firms that are vulnerable to takeovers pre-emptively manage earnings in anticipation of such events. We find a positive relationship between firms' vulnerability to takeovers and their propensity to manage earnings, mainly through the manipulation of real activities. We consider two motivations for firms' pre-emptive earnings management behavior; (1) to deter future takeovers and (2) to optimize M&A outcomes. Concerning the former, we document evidence consistent with entrenched managers using real earnings management to deter or delay future takeovers. Concerning the latter, we find evidence suggesting that, contingent on receiving takeover bids, vulnerable firms that pre-emptively manipulate real activities extract comparatively higher merger premiums. Overall, our findings suggest that managers of vulnerable firms pre-emptively manage earnings to purposefully delay the timing and optimize the outcomes of prospective takeovers.
published_date 2024-03-14T10:49:30Z
_version_ 1795940753883529216
score 11.037603

Similar Items