Abstract
This study investigates the relationship between serial M&A and stock price crash risk. Employing an international sample of 22,140 unique firms from 42 economies between 1989 and 2017, we show that serial acquirers experience higher subsequent crash risk after they initiate serial M&A. Consistent with the bad news hoarding channel, we find that serial M&A are associated with worse subsequent firm-level accounting information environment and poorer operating performance. Moreover, the observed heightened crash risk is more pronounced in countries with opaque information environments or weaker shareholder protection. Our results remain unchanged in several robustness checks addressing endogeneity issues.
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