American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures
American Economic Journal: Microeconomics
vol. 16,
no. 4, November 2024
(pp. 77–111)
Abstract
Antitrust authorities search public documents to discover anti-competitive mergers. Thus, investor disclosures may alert them to deals that would otherwise go undetected, creating disincentives for managers to divulge certain transactions. We study this behavior in publicly traded US companies. First, we employ a regression discontinuity approach to estimate the effect of mandatory disclosures. We find that releasing information to investors poses antitrust risk. Second, we introduce a method for measuring undisclosed mergers that relies on financial accounting reporting requirements. We find that undisclosed mergers total $1.85 trillion between 2002 and 2016.Citation
Barrios, John M., and Thomas G. Wollmann. 2024. "A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures." American Economic Journal: Microeconomics, 16 (4): 77–111. DOI: 10.1257/mic.20220064Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- G38 Corporate Finance and Governance: Government Policy and Regulation
- K21 Antitrust Law
- L41 Monopolization; Horizontal Anticompetitive Practices
- M41 Accounting
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