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- Publisher
- Wiley
- Copyright
- Accounting and Finance © 2022 AFAANZ
- ISSN
- 0810-5391
- eISSN
- 1467-629X
- DOI
- 10.1111/acfi.12872
- Publisher site
- See Article on Publisher Site
Abstract
This study investigates the governance effect of comment letters. Companies with severer information asymmetry are more likely to receive merger and acquisition (M&A) comment letters, which demonstrate a lower M&A success rate; however, such companies exhibit better long‐term M&A performance. Further analysis shows that the long‐term governance effects are stronger in cross‐industry and cross‐region samples and that the transmission channels are information disclosure and internal control quality of the inquired firms. This study enriches the literature on government regulation effectiveness, develops new evidence on the localisation of government regulation from developed economies, and provides policy implications for further regulation reform in transition economies.
Journal
Accounting & Finance – Wiley
Published: Jun 1, 2022
Keywords: Information asymmetry; Comment letters; Merger and acquisition; Regulatory effectiveness