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Acquisition negotiation: the influence of accounting on trust development

Hannu Puhakka (Department of Accounting, Aalto University School of Business, Helsinki, Finland)

Management Research

ISSN: 1536-5433

Article publication date: 10 April 2017




This study aims to explore the influence of accounting on trust development in the context of an acquisition negotiation process at the pre-merger stage.


This study adopted a case study research method. Data have been gathered from an acquisition process of two Finnish companies through 18 semi-structured field interviews with the seller’s, the buyer’s and the merged companies’ top management and external advisors who participated in the process.


The study shows how accounting operated as a trust-building mechanism and served as a substitute for personal-based trust. Accounting assisted the negotiators to surface their initial positive beliefs about the acquisition outcome. Progressively, these positive beliefs outweighed negotiators’ initial negative beliefs regarding the acquisition process. Additionally, accounting enabled the negotiators to show risky behaviors via escalating commitment to the acquisition through ad hoc calculations and continuous discussions.


This study adds to the limited prior research examining interfirm trust and the influence of accounting on trust development during acquisition negotiations.



The author thanks the Foundation for Economic Education, the Finnish Cultural Foundation and Satakunta Students’ Association (Helsinki University) for funding this study. The author also highly appreciates Professor Juhani Vaivio (Aalto University School of Business, Finland) for comments on an early draft of this paper; Pasi Puranen for the Abstract’s Spanish translation; and the Finnish managers who participated in the study.


Puhakka, H. (2017), "Acquisition negotiation: the influence of accounting on trust development", Management Research, Vol. 15 No. 1, pp. 12-27.



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