Topic: Equity Trading Halts and Market Reactions: The Evidence of M&As in China

Speaker: In-Mu Haw

Date & Time: 14:00-15:30 Monday, July 10, 2023

Venue: Room 245, Quan Xue Building

Organizers: School of Accounting, Dongbei University of Finance and Economics, P.R. China & Liaoning Capital Market Finance and Accounting Graduate Innovation and Academic Exchange Center

Abstract:

Investors often react negatively to merger and acquisition (M&A) announcements. This study examines how integrative information strategies might help reverse this outcome. Drawing first from signaling and efficient market theories, we argue that managers use information signals to capture investor attention, provide the firm opportunity to share positive information about a forthcoming M&A, which investors subsequently factor into the firm’s financial value once the announcement is made. Next, combining anticipatory impression management with priming theory, we argue that longer periods for sharing information prior to the M&A announcement will be related to investor reaction in an increasingly positive manner. We test these arguments using equity trading halts, whereby firms suspend the exchange of their stocks, disseminate information about a forthcoming M&A, and then formally announce the deal once trading is resumed. Data from tests of 1,584 M&As made in China during 2007-2016 support expectations.

Introduction of Speaker:

In-Mu Haw (Renmao Xu) , professor of accounting at the Neeley School of Business at Texas Christian University in the United States, and Xinghai chair professor at Dongbei University of Finance and Economics currently. He has also served as an associate professor of accounting at Bernard M.Baruch College, a visiting professor at the Chinese University of Hong Kong, a visiting professor at Hong Kong Baptist University, a visiting professor at the University of Macau, and a visiting professor at the Hang Seng University of Hong Kong. Professor Xu has published over 50 academic research papers in high-quality accounting, finance, and management journals such as Journal of Accounting Research, The Accounting Review, Journal of Accounting and Economics, Review of Accounting Studies, Contemporary Accounting Research, Journal of Operations Management, Auditing: A Journal of Practice and Theory, Journal of Corporate Finance, Journal of Banking and Finance, Financial Management, Journal of Accounting, Auditing and Finance, and received over 60 research and teaching awards. He served as the co-editor of The International Journal of Accounting from 2006 to 2022, and as the deputy editor of Review of Quantitative Finance and Accounting from July 2019. He has taught master's and doctoral programs in the United States, Germany, Chinese Mainland, Hong Kong, and Macao.

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