Pre-merger management in developing markets: The role of earnings glamor

For a broad, 16-year sample of mergers by Chinese listed firms, we document that income-increasing earnings management through both discretionary accruals and real activities in the year immediately preceding mergers significantly increases the probability of deal payment all or partially in stock. Concomitantly, in contrast to Western developed markets, we find these share-for-share bidders outperform pure-cash bidders during times close to...