Does policy uncertainty predict the death of M&amp;A deals?

Dang, Man; Henry, Darren; Thai, An; Vo, Xuan Vinh; Mazur, Mieszko

doi:10.1016/j.frl.2021.102489

Cited by 12 publications

(8 citation statements)

References 25 publications

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“…Companies should assume responsibility for the environment and abide by environmental laws by actively engaging in the carbon emission trading market. Policy uncertainty causes behavioral changes in corporations and individuals and their decision-making in various economic activities [9]. In a recent study, Hu et al [10] show that environmental policy uncertainty inhibits corporate green investments.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Additionally, developing nations might need more tools to oversee, implement, and guarantee adherence to laws and policies [1].In both situations, economic policy uncertainties can make it challenging for people and companies to make well-informed choices and investments [9,10]. It may result in project delays, decreased investment, and greater risk, harming economic development and climate change.…”

Section: Introductionmentioning

confidence: 99%

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Analysis of the Impact of Economic Policy Uncertainty on Environmental Sustainability in Developed and Developing Economies

Huafang

Ali²,

Solangi

2023

Sustainability

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The literature on the impact of policy uncertainty on climate change has grown rapidly in recent years as policymakers and researchers have become increasingly concerned about the potential adverse effects of policy uncertainty on environmental sustainability. This study aims to investigate the impact of economic policy uncertainty (EPU), GDP per capita, renewable energy consumption (REC), and foreign direct investment (FDI) on environmental sustainability from the perspectives of the environmental Kuznets curve (EKC) and pollution halo/haven hypotheses. The research employs panel data analysis techniques, including panel corrected standard errors (PCSE) and generalized least squares (GLS), to analyze the data from a panel of 19 developed and developing countries from 2001 to 2019. The results reveal that EPU, GDP per capita, REC, and FDI significantly impact GHG emissions, contributing to climate change. The results of the study confirm a U-shaped EKC and pollution haven hypothesis in the selected economies. The findings of this study provide valuable insights for policymakers, as they highlight the need to consider the interplay between economic growth, foreign investment, and environmental policy in addressing climate change. The results also suggest that reducing policy uncertainty and promoting sustainable economic growth can mitigate the effects of climate change and ensure environmental sustainability.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Analysis of the Impact of Economic Policy Uncertainty on Environmental Sustainability in Developed and Developing Economies

Huafang

Ali²,

Solangi

2023

Sustainability

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“…The imperfect markets theory suggests that the driving force behind acquisitions is to establish competitive advantages for the acquiring company [3]. However, uncertainty surrounding government economic and political policies can influence the incentive for information gathering, information-based trading activities, and disclosure choices made by firms, potentially affecting the stock prices of both the acquiring and target firms.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…Even, the results appear to be unrelated to a country's institutional environment's quality. [3] further investigate whether national policy risks influence the choice of payment method in cross-border mergers and acquisitions using a multicountry sample. The study finds that policy uncertainty is negatively related to cash payment method.…”

Section: Introductionmentioning

confidence: 99%

The impact of policy uncertainty on stock liquidity in Vietnam’s M&A market

Man,

Toan

2023

UD-JST

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This study investigates the impact of policy uncertainty on stock liquidity in Vietnam’s M&A market. Using a comprehensive sample of M&A acquisition deals over the 2005-2020 period, we find that policy uncertainty is negatively associated with stock liquidity of target firms, indicating that firms should increase their information disclosure to improve the information environment during periods of increased asymmetric information due to policy uncertainty. We also find that higher levels of policy uncertainty lead to lower market valuations of target firms, reflecting greater market skepticism about the completion of the transaction and related synergy benefits. This study highlights the importance of transparency in improving stock liquidity and suggests that policymakers need to consider the impact of domestic economic and investment policies on M&A activity and stock liquidity in Vietnam.

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“…M&A plays an important role in firms' development, and their M&A decisions are influenced by factors such as M&A experience, impact and effectiveness. Jin and Jia (2003) found a certain inertia in corporate M&A behavior, that is, companies prefer their previous types of M&A, regardless of changes in the economic environment; Dang et al (2021) found that companies tend to choose different M&A in different portions of the life cycles. When the company is at the growth stage, horizontal M&A is effective; when the industry or the company is in the mature stage, the effects of vertical M&A are more obvious.…”

Section: Literature Reviewmentioning

confidence: 99%

Policy uncertainty, social responsibility and corporate M&A

Lan

Zhang

et al. 2022

JBIM

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Purpose This paper aims to focus on corporate social responsibility in relation to economic policy uncertainty in mergers and acquisitions (M&A). The following questions are addressed: How does policy uncertainty impact corporate M&A? Does social responsibility play a mediating role in this process? How does policy uncertainty affect corporate M&A through social responsibility? Design/methodology/approach This paper selects the major M&A events in China as the research object, and uses the Probit model to analyze the impact of policy uncertainty on M&A behavior and the business performance after the event, and further analyzes the internal mechanisms that cause these phenomena. Findings This paper shows that the higher the policy uncertainty, the lower the probability of a successful M&A, and the worse the business performance of the business after the event. Originality/value This paper provides useful reference for the study of M&A and social responsibility in different policy environments. At the same time, it provides direct empirical evidence to enhance the success rate of M&A.

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Does policy uncertainty predict the death of M&A deals?

Cited by 12 publications

References 25 publications

Analysis of the Impact of Economic Policy Uncertainty on Environmental Sustainability in Developed and Developing Economies

Analysis of the Impact of Economic Policy Uncertainty on Environmental Sustainability in Developed and Developing Economies

The impact of policy uncertainty on stock liquidity in Vietnam’s M&A market

Policy uncertainty, social responsibility and corporate M&A

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