Bringing work on M&A behavioral antecedents to the Academy of Management in Seattle

It now is a wrap at the Academy of Management Conference in Seattle, were we presented some ongoing work as part of the Behavioral Antecedents of Mergers and Acquisitions research line that I have going on recently.The working paper is driven by my phd student Jonas Roettger who has been mobilizing the full promotor team to take this promising work to the next level. The current concept is entitled:

Behavioral Signal Sets in Acquisition Announcements and the Market: An Impression Management View”.

The presented working paper thereby revolves around organizations’ attempts to manage stakeholder perception by manipulating strategic announcements’ linguistic tone (sometimes referred to as sentiment). This study on 2000 acquisition announcements revealed that firms tend to be overly optimistic in their announcements, but surprisingly investors react more negatively to positive announcements.

However, this relationship hinges on other signals that help investors assess the value-creating potential of a deal, like an acquirer’s leverage and the payment method used to finance the deal. Overall, the results suggest that linguistic tone has a substantial effect on investors’ evaluation.