Journal of Financial and Quantitative Analysis Vol. 60 No. 6 2025

Does Speculative News Hurt Productivity? Evidence from Takeover Rumors

Christian Andres¹; Dmitry Bazhutov²; Douglas J. Cumming³; Gerrit Köchling⁴; Peter Limbach⁵

¹ WHU – Otto Beisheim School of Management · ² University of Wuppertal Schumpeter School of Business and Economics · ³ Florida Atlantic University and Stevens Institute of Technology · ⁴ Technical University of Dortmund · ⁵ University of Bielefeld and Centre for Financial Research

Abstract

We show that productivity at both the firm and employee (i.e., analyst and inventor) level temporarily declines upon announcements of takeover rumors that do not materialize. Such speculative news may hurt productivity because uncertainty and the threat of job loss cause anxiety, distraction, and reduced commitment among employees and managers. Consistently, we observe a more pronounced productivity dip for rumored targets and when the likelihood of job loss is higher. Firm performance mirrors these results. We find no indication of reverse causality. The evidence fosters our understanding of potential real effects of speculative financial news and the costs of takeover threats.

DOI

10.1017/s0022109024000541

Volume

60

Issue

6

Pages

2952-2996

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓