Home > Research > Publications & Outputs > 10-K Filing length and M&A returns

Electronic data

  • Manuscript

    Rights statement: This is an Accepted Manuscript of an article published by Taylor & Francis in The European Journal of Finance on 24/11/2019, available online:  https://www.tandfonline.com/doi/full/10.1080/1351847X.2019.1694959

    Accepted author manuscript, 609 KB, PDF document

    Embargo ends: 24/05/21

    Available under license: CC BY-NC: Creative Commons Attribution-NonCommercial 4.0 International License

Links

Text available via DOI:

View graph of relations

10-K Filing length and M&A returns

Research output: Contribution to journalJournal article

Published
Close
<mark>Journal publication date</mark>29/02/2020
<mark>Journal</mark>European Journal of Finance
Issue number6
Volume26
Number of pages22
Pages (from-to)532-553
Publication StatusPublished
Early online date24/11/19
<mark>Original language</mark>English

Abstract

This study examines the association between 10-K filing length and M&A returns. We posit that 10-K filing length influences shareholder information acquisition and processing costs. Longer 10-K filings reduce information acquisition costs by making more information about the target available to the shareholder, but may increase information processing costs by increasing the difficulty of extracting that information. Which effect dominates ultimately determines the association between 10-K filing length and M&A returns. We find that 10-K filing length is positively related to M&A returns, suggesting that the reduction in information acquisition costs dominates the increase in information processing costs. This relation is stronger when the acquirer has limited access to private information about the target, and when 10-K filings contain text denoting risk. The relation is weaker when 10-K filings contain complex text and financial statements exhibiting high accounting quality.

Bibliographic note

This is an Accepted Manuscript of an article published by Taylor & Francis in The European Journal of Finance on 24/11/2019, available online:  https://www.tandfonline.com/doi/full/10.1080/1351847X.2019.1694959