Pietro Bonetti (IESE Business School) visiting FAccT Center Research Seminar

On March 8th 2019, Pietro Bonetti (IESE Business School) presented his current topic "Disclosure Regulation and Corporate Acquisitions" (co-authored with Miguel Duro and Gaizka Ormazabal, both from IESE Business School) at the WHU Research Seminar in Finance & Accounting.

The paper examines the effect of disclosure regulation on the market for corporate Control. The authors study the implementation of a recent European regulation imposing tighter disclosure requirements regarding the financial and ownership information provided by public firms. They find a substantial drop in the number of control acquisitions after the implementation of the regulation, a decrease that is concentrated in countries with more dynamic takeover markets. Consistent with the idea that the disclosure requirements increased acquisition costs, they also observe that, under the new disclosure regime, target (acquirer) stock Returns around the acquisitions announcement are higher (lower), and toeholds are substantially smaller.  Overall, their evidence suggests that tighter disclosure requirements can impose significant acquisition costs on bidders and thus slow down the merket for corporate control.