Big Data Analytics and Mergers and Acquisitions

Abstract

Mergers and Acquisitions (‘M&A’) are pivotal approaches for firms aiming to create value and achieve growth objectives. However, information asymmetry between the acquiring and target firms — where the acquiring firm is at an informational disadvantage regarding the target firm’s true value — often hampers these objectives. This asymmetry makes both target identification and deal completion significant challenges for acquiring firms. Big data analytics (‘BDA’) has emerged as a valuable tool for mitigating information asymmetry and enhancing strategic decision-making by enabling acquiring firms to gather, process, and analyse vast amounts of structured and unstructured data. Despite its potential, the mechanisms through which BDA influences M&A remain underexplored in academic literature, highlighting a critical area for further research. To investigate the role of BDA in the M&A context, this doctoral thesis draws on the attention-based view (‘ABV’) and posits that managerial attention to BDA, as a limited yet vital resource, can significantly impact the outcomes of the M&A “pre-completion” stage. The thesis comprises three main chapters. Chapter 2 aims to articulate the theoretical background and explore the role of BDA in the M&A “pre-completion” stage. It begins with a literature review on BDA and strategic decision-making within the management field, emphasizing the growing recognition of BDA’s business value and the managerial shift toward data-driven approaches. This chapter then identifies key implications and directions for future research related to BDA and M&A. Building on the ABV, Chapters 3 and 4 present stand-alone studies that develop theoretical frameworks and test predictions regarding BDA’s impact on M&A outcomes during the “pre-completion” stage, focusing on a sample of Chinese publicly listed firms from 2015 to 2021. Specifically, Chapter 3, through firm-level analysis, investigates whether managerial attention to BDA affects the number of M&A announcements made by acquiring firms. The empirical results reveal a clear positive association between BDA attention and the number of M&A announcements. This association is further strengthened under conditions of higher levels of external environment uncertainty and when firms demonstrate greater effectiveness in deploying their capabilities. This chapter also finds that M&A experience can substitute for the positive effects of BDA attention on the number of M&A announcements. Chapter 4 extends the analysis to examine the role of BDA attention after public announcements, focusing on deal completion likelihood through a deal-level analysis. The empirical findings suggest that BDA attention increases the probability of deal completion, with this positive effect of BDA attention being especially pronounced in diversifying M&A cases. Overall, this doctoral thesis demonstrates how managerial attention to BDA significantly influences both the number of M&A announcements and deal completion likelihood. By integrating insights from BDA and ABV literature, this thesis advances M&A scholarship and provides practical guidance for decision-makers on paying attention to BDA to address information asymmetries and improve M&A outcomes under specific conditions.

Date of Award	26 Mar 2025
Original language	English
Awarding Institution	University of Bath
Supervisor	Panos Desyllas (Supervisor) & Michael Mayer (Supervisor)