استفاده از اطلاعات حسابداری مالی در حاکمیت تصاحبی: تجزیه و تحلیل بر اساس نوع فراگیرنده

The substantial changes in the corporate governance mechanism of acquired firms that take place during the periods surrounding corporate acquisitions lead investors and other corporate financiers to an intensive search for financial accounting inputs for decision making. We examine whether financial accounting information on takeover targets provides useful input in the corporate governance mechanisms of US publicly traded takeovers in these periods. Our analysis is by four different types of acquirers: foreign firms, publicly traded US firms, private US acquirers, and leverage buyouts (LBOs). We expect that certain firm-specific financial accounting characteristics of takeover targets by type of potential acquirer affect valuation. To examine this expectation we construct a probability summary-value measure, composed of eight financial accounting variables, based on the type of acquirer. We also expect the probability summary-value measure to be useful for determining investment strategies in acquired firms. The empirical results strongly support our expectations.

During periods surrounding corporate acquisitions, the corporate governance mechanism of acquired firms changes substantially. In particular, new potential financiers such as the new investors and acquiring firms extensively scrutinize publicly available information in search of inputs. A major research question that has been partially ignored in prior literature is how relevant accounting information is during these periods. In these settings, financial accounting information may play a more prominent role in corporate governance mechanisms and should therefore have greater value relevance to investors and other financiers of the firm, increasing their demand for such information when making decisions. In this study, we examine the value relevance of information available from the financial statements of US publicly traded acquired firms prior to the acquisition. Our focus is on the value relevance of the accounting information to different types of acquirers and other investors in target firms. We identify four types of acquirers: foreign firms, publicly traded US firms, private US acquirers, and leverage buyouts (LBOs).2 We expect the accounting information of the acquired firms to differ across types of acquirers and provide different inputs and signals to investors. In addition, we expect that the accounting information is useful for investment strategy in choosing among acquired firms. Extant accounting studies use earnings and book value of equities to explain prices and returns. Rather than focusing only on earnings and book values, which may not provide sufficient information at the end of the firm’s life cycle, we construct a probability summary-value measure (Ou and Penman, 1989), composed of other components of accounting data. This measure includes specific characteristics of accounting information used by each type of potential major financier in the corporate governance of takeovers, and differs, on average, across acquired firms classified by the four types of acquirers. We use three methodologies to test our research expectations. First, we employ logistic regressions to generate the probability measure. While constructing the probability measure, we find that the logistic regression performs well and certain firm-specific financial accounting characteristics of the acquired firms are useful in identifying the type of acquirer.3 Second, we employ OLS price and return regressions. We find that the probability summary-value measure is value relevant in price and return models. In particular, we show that the probability summary-value measure is significant while neither earnings nor changes in earnings are significant in return models. Third, we use univariate statistics to examine whether the probability summary-value measure is useful for investment strategy in choosing among acquired firms. We find that the probability measure is a very powerful investment instrument. In sum, the empirical results strongly support our expectations. The remainder of the paper is organized as follows. The next section provides further empirical background. The third section details the motivation and incremental contribution of our study, and provides a literature review. Section 4 deals with the research methods, and Section 5 presents the data. Section 6 analyzes the results, and Section 7 provides a summary and conclusions.

This study examines whether financial accounting information on US publicly traded target firms provides useful input for the corporate governance mechanisms of these firms, facilitated by four different types of acquirers, during the period surrounding the acquisition. For this purpose, we examine the value relevance of information available from the financial statements of US publicly traded acquired firms prior to the acquisition. Our focus is on value relevance of the accounting information to different types of acquirers and other investors in acquired firms. The acquired firms are grouped into four types of acquirers: foreign firms, publicly traded US firms, private US acquirers, and leverage buyouts (LBOs). We expect that accounting information of the acquired firms differ across types of acquirers and provides different inputs and signals to investors. In addition, we expect that the accounting information is useful for investment strategy in choosing among acquired firms. Rather than focusing only on earnings and book values, which may not provide sufficient information at the end of the firm’s life cycle, we construct a probability summary-value measure, composed of other components of accounting data. This measure consists of specific characteristics of accounting information used by each type of potential major financier in the corporate governance of takeovers. This probability measure differs across acquired firms classified by the four types of acquiring firms. We use logistic regression to construct the probability summary-value measure and find that certain firm-specific financial accounting characteristics of the acquired firms are useful in identifying the type of acquirer. Then, we employ OLS price and return regressions and provide strong evidence that the probability summary-value measure is value relevant in price and return valuation models. Finally, we use univariate statistics to examine whether the probability summary-value measure is useful to potential investors for investment strategy in choosing among acquired firms. We find that the probability measure is a very powerful investment instrument. In sum, the empirical results strongly support our expectations. Our test sample consists of most of the population of US publicly traded manufacturing firms acquired in the period 1978 through 2001. In addition, we use a control sample drawn from the population of US publicly traded manufacturing firms that were active during the 1980s and remained active throughout the year 2002. In sum, our results strongly indicate that the probability summary-value measure provides investors with incremental value-relevant information beyond that provided by earnings and book values of equities, which alone do not provide sufficient information to explain returns during the period surrounding the acquisition announcements. Overall, the results imply that the financial accounting characteristics of acquired firms differ across the four types of acquirers, providing dissimilar signals as input for effective operation of the corporate governance mechanisms of US takeovers. Thus, our study suggests the increasing importance of financial accounting information during takeovers. Finally the probability summary-value measure is shown to be beneficial to the investment strategies in takeovers.