Journal of Accounting and Management Vision

Journal of Accounting and Management Vision

An Examination of Investor Attention and Market Reactions to Initial Announcements in the Mergers and Acquisitions Process among Companies Listed on the Tehran Stock Exchange

Document Type : Original Article

Author
shaghayegh shahinfar
Master's degree student in Accounting, Damavand Institute of Higher Education, Tehran, Iran.
Abstract
The aim of this study is to investigate investor attention and market reactions to initial announcements during the mergers and acquisitions (M&A) process in companies listed on the Tehran Stock Exchange (TSE). The temporal scope of the research spans an 8-year period from 2016 to 2023, while the spatial scope includes the TSE and its listed firms. To test the validity of the research hypotheses, a multivariate panel regression model with fixed effects was employed, using EViews 11 software.

The findings related to the first hypothesis reveal that early-announced deals attract significantly more investor attention compared to late-announced ones. The analytical results of the second hypothesis indicate that early announcements have a significant and positive effect on short-term market responses, as evidenced by higher short-term abnormal returns. Finally, the results of the third hypothesis suggest that early-announced deals exert a significant and negative impact on long-term market reactions, reflected in higher abnormal returns over the long run.
Keywords
Investor Attention
Market Reactions
Initial Announcements
Mergers and Acquisitions Process

Subjects