文章基本信息

标题：The role of accounting conservatism in M&A target selection
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作者：Qingquan Tang ; Jingjing Guo ; Zhihong Huang 等
期刊名称：China Journal of Accounting Research
印刷版ISSN：1755-3091
出版年度：2021
卷号：14
期号：4
页码：1-22
DOI：10.1016/j.cjar.2021.100204
语种：English
出版社：Elsevier
摘要：AbstractMergers and acquisitions (M&As) are among the most important investment activities for companies, but they contain great risks. We investigate the role of accounting conservatism in M&A target selection and risk. We find that for risk-averse reasons, firms with high accounting conservatism are likely to acquire profitable targets and avoid loss-making targets. When such firms acquire loss-making targets, the conservatism’s risk-control role reduces M&A risk and increases M&A performance, but only when control of the target is transferred and the acquirer has high long-term debt and low management power. Furthermore, accounting conservatism reduces risk by increasing the maturity match between cash flow and debt. Our results suggest that accounting conservatism plays not only a risk-averse role but also a risk-control role, providing new evidence for the usefulness of accounting conservatism in M&A decisions.
关键词：KeywordenTarget selection;Accounting conservatism;Risk aversion;Risk control