An acquirer's decision to undertake an acquisition, together with its choice of target, can systematically reveal its technological gap. The underlying selection mechanism allows the market to distinguish technological laggards from leaders and update valuations accordingly. I measure this revealed gap as the technological overlap between the target and the acquirer's industry. Acquirers with larger revealed gaps experience more negative announcement returns, but only when the target is more transparent than the acquirer and thus conveys information beyond the market's prior beliefs. This effect is concentrated in the component of target choice unexplained by acquisition determinants identified in prior studies. Moreover, revealed gaps induce opposite market reactions among the acquirer's industry peers. Additional tests help rule out alternative explanations. Taken together, these findings highlight a selection-based mechanism that helps explain the cross-section of acquirer announcement returns.

This paper examines how populism shapes the transmission of monetary policy. Combining credit-registry and firm survey data from Germany with voter shares for the populist party AfD, I find that firms in high-populism districts hold elevated inflation expectations and revise them less in response to monetary policy surprises. Most strikingly, their credit demand response is similarly attenuated, indicating that populism significantly weakens the credit channel. An analysis of over 700,000 German-language tweets is consistent with a distorted information environment: AfD-affiliated media cover ECB decisions less promptly and frame them more negatively than conventional outlets. In addition, firms whose managers report lower trust in the ECB revise their expectations less and show a similarly muted credit demand response to policy surprises, pointing to institutional distrust as part of the underlying mechanism. A New Keynesian model extended to incorporate biased perceptions rationalizes these findings: distorted beliefs weaken policy transmission and exacerbate adverse shocks, posing significant challenges for central banks in increasingly polarized environments.