{"title":"Mergers and acquisitions comment letters and analysts' earnings forecasts: Evidence from China","authors":"Liangyong Wan , Chen Li , Rui Xu , Hao Zhang","doi":"10.1016/j.pacfin.2024.102470","DOIUrl":null,"url":null,"abstract":"<div><p>In this study we examine the effect of the mergers and acquisitions (M&A) comment letters on the analysts' earnings forecasts in China. Using the M&A data of listed companies between 2014 and 2018 as the main sample, we show that the M&A comment letters can reduce analysts' earnings forecast optimism. Additionally, the impact of the M&A comment letters on analysts' earnings forecast optimism <!--> <!-->is more pronounced in firms with higher market sentiment and higher conflicts of interest. Finally, the textual characteristics of the M&A comment letters and the classification of questions in the M&A comment letters also influence analysts' earnings forecast optimism. Our research broadens the economic consequences of the M&A comment letters and provides a richer theoretical perspective and empirical evidence to understand the effectiveness of non-penalty regulation.</p></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"86 ","pages":"Article 102470"},"PeriodicalIF":4.8000,"publicationDate":"2024-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Pacific-Basin Finance Journal","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0927538X24002221","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
In this study we examine the effect of the mergers and acquisitions (M&A) comment letters on the analysts' earnings forecasts in China. Using the M&A data of listed companies between 2014 and 2018 as the main sample, we show that the M&A comment letters can reduce analysts' earnings forecast optimism. Additionally, the impact of the M&A comment letters on analysts' earnings forecast optimism is more pronounced in firms with higher market sentiment and higher conflicts of interest. Finally, the textual characteristics of the M&A comment letters and the classification of questions in the M&A comment letters also influence analysts' earnings forecast optimism. Our research broadens the economic consequences of the M&A comment letters and provides a richer theoretical perspective and empirical evidence to understand the effectiveness of non-penalty regulation.
期刊介绍：
The Pacific-Basin Finance Journal is aimed at providing a specialized forum for the publication of academic research on capital markets of the Asia-Pacific countries. Primary emphasis will be placed on the highest quality empirical and theoretical research in the following areas: • Market Micro-structure; • Investment and Portfolio Management; • Theories of Market Equilibrium; • Valuation of Financial and Real Assets; • Behavior of Asset Prices in Financial Sectors; • Normative Theory of Financial Management; • Capital Markets of Development; • Market Mechanisms.
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