How Do M&A Rumours Influence Deal Completion? The Role of Board Gender Diversity and Language Differences

Abstract In this study, we apply the upper echelons theory (UET) lens to investigate how M&A rumours influence deal completion. Based on our findings, we propose a two‐stage channel that drives the rumour‐specific effect. In doing so, we provide theoretical arguments and empirical support for the relationship between M&A rumours and deal completions via grammatical gender marking and board gender diversity. Drawing on firm‐level data from 70 countries over 2009–2017, we find that low levels of grammatical gender marking and high levels of board gender diversity are negatively associated with rumours. This leads us to conclude that the presence of women on boards increases the likelihood of M&A deal completion by reducing rumours.