Accounting Seminar: Professor Gaizka Ormazabal
Disclosure Regulation and Corporate Acquisitions
This paper examines the effect of disclosure regulation on the market for corporate control. We exploit the implementation of the Transparency Directive of 2004, a legislation that imposed tighter disclosure requirements regarding the financial and ownership information provided by European public firms. We find a substantial drop in the number of control acquisitions after the introduction of the regulation, a decrease that is concentrated in countries with more dynamic takeover markets. We also find that takeover premiums are higher and acquirers’ stock returns at the acquisition announcement are lower under the new disclosure regime. Additional analyses show that the documented patterns appear to be driven by the tightening of the disclosure requirements for major shareholdings, especially those related to equity derivatives. Overall, our evidence suggests that tighter disclosure requirements can impose significant acquisition costs on bidders and thus slow down the market for corporate control.
Professor Gaizka Ormazabal received a PhD in Business from Stanford University, a PhD in Construction Engineering from Universitat Politècnica de Catalunya, and a Bachelor's Degree in Civil Engineering (Ingeniería de Caminos, Canals y Puertos) from Universitat Politècnica de Catalunya.
Professor Ormazabal's research focuses on executive compensation and corporate governance. His work examines the choice and valuation implications of corporate governance mechanisms. His current research projects analyze managerial risk-taking incentives, corporate risk oversight, financial regulation, asset securitization, and the role of corporate governance intermediaries.
His research appears in leading academic journals including Journal of Financial Economics and The Accounting Review. His research has been featured in the popular media, including such outlets as the Wall Street Journal and the New York Times, and has been cited in final rulings by the U.S. Securities and Exchange Commission.