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1	The Impact of Mergers & Acquisitions on Credit- and Investment risk. : -Evidence from Sweden Dahlberg, Casper, Lundberg, Max January 2022 (has links) We examine the impact of Mergers & Acquisitions on credit- and investment risk using a sample of 402 acquisitions by 215 Swedish firms from 2000 to 2020. We find significant evidence that, on average, M&A increases the credit risk and inversely decreases the investment risk of the acquiring firm. Our results indicate that firm credit risk however is positively correlated with investment risk. After controlling for specific deal- and firm characteristics, our findings suggest that managerial hubris decreases the level of credit risk and increases the level of investment risk in acquiring firms. Our results are consistent with the asymmetric information hypothesis that managers may exploit the volatility of their stock price to hide risk-increasing activities. We also observe that acquirers with high pre-deal credit risk undertake acquisitions that decrease credit risk and increase investment risk. We find no significant impact from neither method of payment nor valuation errors. Mergers & Acquisitions M&A Credit Risk Investment Risk Default Risk The Institutional Imperative Merton’s Distance-to-Default model Merton’s DD Value-at-Risk VaR Tail risk. Business Administration Företagsekonomi