The Effects Of Acquirer Size On Rival’s Acquisition Announcement Time

The firm acquisition phenomena are very active in today’s business and become the center topic of management research. While most of researches focus on the effects of acquiring and target firm characteristics on acquisition behavior, few cover the impact of acquisition on rival firms. Existed results suggest acquisition will induce rival firms to imitate and initiate acquisition to respond, and the acquisition announcement time describes the willingness and intense of the response.Based on competitive dynamic theory, our research examines the effects of acquirer size on rival firm’s acquisition announcement time and the moderating effects of analyst recommendation and ownership balance. We also examine the effects of relative status between acquirer and rival firm on rival firm’s acquisition announcement time and the moderating effects of media coverage and industry performance. This study focus on four issues with the consideration of China A share listed companies:(1) How does the acquirer size influence the rival firm’s acquisition announcement time;(2) Will analyst recommendation and ownership balance respectively moderates the effects of acquirer size on rival firm’s acquisition announcement time;(3) How does the relative status between acquirer and rival firm influence the rival firm’s acquisition announcement time;(4) Does media coverage and industry performance respectively moderates the effects of relative status on rival firm’s acquisition announcement time.Through statistical regression analysis based on586acquisition samples, the results suggest that:(1) Acquirer size has a U-shaped relationship with the rival firm’s acquisition announcement time;(2) The U-shaped relationship between acquirer size and rival firm’s acquisition announcement time is weaker when analyst recommendation is high rather than low;(3) The U-shaped relationship between acquirer size and rival firm’s acquisition announcement time is weaker when ownership balance is high rather than low;(4) Relative status between acquirer and rival firm has a U-shaped relationship with the rival firm’s acquisition announcement time;(5) The U-shaped relationship between relative status and rival firm’s acquisition announcement time is weaker when media coverage is high rather than low;(6) The U-shaped relationship between relative status and rival firm’s acquisition announcement time is stronger when industry performance is high rather than low.The results give the detail analysis of mechanism that between acquirer size, relative status and rival firm’s acquisition announcement time, and explain the attack and respond behaviors in the same industry. And also, the research suggests that under the circumstance of higher analyst recommendation, higher media coverage, more balanced ownership and poor industry performance, rival firms will be more sensitive to the acquirer size or relative status, and will respond faster.