Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249671 
Year of Publication: 
2021
Series/Report no.: 
CFR Working Paper No. 21-02
Version Description: 
December 2021
Publisher: 
University of Cologne, Centre for Financial Research (CFR), Cologne
Abstract: 
Takeover speculation may hurt productivity because uncertainty and threat of job loss cause anxiety, distraction, and reduced collaboration and morale among employees. Using a large panel of OECD-headquartered firms, we show that firm productivity temporarily declines after announcements of speculative takeover rumors that do not materialize. This productivity dip is more pronounced for targets and for firms in countries with lower levels of employee rights and long-term orientation. Abnormal stock returns mirror these results. The evidence fosters our understanding of potential real effects of speculative news, which are common in financial markets, and the costs of the takeover threat.
Subjects: 
Distraction
Employee commitment
Employee rights
Fear of job loss
Productivity
Shareholder wealth
Takeover speculation
JEL: 
D24
G00
G34
J24
Document Type: 
Working Paper

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