Short- and Long-Term Consequences of a Signal to Multiple Stakeholders: Evidence from Japanese Firms

Abstract

Mergers and acquisitions (M&As) are increasingly important globally. In this environment, we observe that Japanese firms have started voluntarily announcing M&A budgets since the 2000s. Given that such announcements may be intended as an anticipatory impression management technique, what are the consequences of such specific announcements from the perspectives of multiple stakeholders both in the short and long run? In the spirit of phenomenon-based research, we address the question by drawing on the research concerning signaling and organizational impression management and by considering the business and social contexts in Japan. We test our hypotheses mainly by using a sample of 895 firms listed on the TOPIX 1000 of the Tokyo Stock Exchange from 2004 to 2017.