Do SPAC Contributions Affect Their Peers' Accounting Quality? Danial Cohen, Kelly Ha, Sunay Mutlu, and John Schomburger
Coles Working Paper Series, FALL22-02, November 2022
OVERVIEW
We explore whether firms going public through mergers with special purpose acquisition company (SPAC) combinations influence their peer firms’ financial reporting quality. Although SPAC combinations provide an efficient alternative to traditional initial public offerings (IPOs) for private firms, recent studies show that their financial reporting is poor. Extending this line of research, we show that their peers’ financial reporting quality actually improves in the years following the merger. Consistent with SPAC combinations attracting regulatory scrutiny of their peer group. The increase in financial reporting quality is driven by the more visible peers. Our study provides a new perspective on the debate over the general effects of SPAC combinations
50 | Working Papers
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