The role of media in mergers and acquisitions

Rose Liao, Xinjie Wang, Ge Wu

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


Using a novel dataset of news events for 170,000 entities across over 100 countries, we examine how media sentiment could affect firm acquisition decisions. Studying 77,552 completed merger and acquisition (M&A) deals around the world from 2000 to 2015, we find that firms with high media sentiment are more likely to become an acquirer and to pay a higher deal premium. The effect of media on the likelihood of an acquisition is stronger for cross-border deals, in countries with higher governance standards, larger firms with fewer financial constraints, and firms with higher market-to-book ratio and more media coverage. Target firms typically have low media sentiment. Acquirers with high media sentiment experience significantly positive returns prior to acquisitions and negative returns post-acquisition, inconsistent with theories of media content as a proxy for new information about fundamental asset values. Overall, we show that the media play an important role in the market for M&As.

Original languageEnglish (US)
Article number101299
JournalJournal of International Financial Markets, Institutions and Money
StateAccepted/In press - 2021
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


  • Governance
  • Investor sentiment
  • Media
  • Mergers


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