scholarly journals Developments and challenges of measuring M&A performance on a corporate and macroeconomic levels

2017 ◽  
Vol 8 (2) ◽  
pp. 199
Author(s):  
Karolis Andriuskevicius ◽  
Remigijus Ciegis
Keyword(s):  
Empirical Studies ◽  
Value Added ◽  
Scientific Article ◽  
Methodological Framework ◽  
Firm Level ◽  
Performance Framework ◽  
Recent Developments ◽  
Business Cases ◽  
And Performance ◽  
A Performance

Research background: This study presents the results of the research which aimed to iden-tify and critically discuss existing methodologies in the merger and acquisition field. Value creation to merging and acquiring firms and national countries constitute the center of the research. This study distinguishes between specific methodologies employed to gauge M&A performance on a micro- (corporate) and macro- (economy and society) economic levels. The final section of the paper concludes with a theoretical methodological framework integrating methodologies employed to measure M&A performance on a firm level and methodologies measuring consequences and effects of M&A on the economy. The aim of the analysis described in the paper is to ascertain and evaluate theoretically existing methodologies used in empirical studies that would allow proper and critical understanding of the results of various findings in the holistic and global M&A area.Purpose of the article: The purpose of the paper is to investigate and critically discuss the methodologies employed within the M&A performance framework with the focus on specific anticipated outcomes of the M&A deal and methodology measuring this outcome. The following objectives are being raised: (1) To identify recent developments in the M&A market and determine challenges and changes they encompass; (2) To identify and critically discuss anticipated outcomes of the M&A deal and existing methodologies measuring M&A performance on the corporate level; (3) To identify and critically discuss anticipated outcomes of the M&A deal on the economy and methodologies measuring consequences and effects of M&As on the macro- economic level; (4) To integrate methodologies measuring M&As performance on a micro- and macro- eco-nomic levels into theoretical methodological framework enabling scholars and practitioners to evaluate M&A performance from a holistic perspective.Methods: Based on previous studies, the authors conduct a structured literature review aimed to critically discuss and evaluate developments and challenges of measuring M&A performance on corporate and macroeconomic levels. The research is carried out as a struc-tured assessment of past literature. The findings from scientific articles and studies by various scholars are being categorized, grouped and summarized to discern a meta‐analytic view of the work carried out to date. Finally, deep analysis of scientific literature, logical comparative analysis, systematization of scientific article and business cases are employed in the article.Findings & Value added: The paper evidences developments and challenges of measuring M&A performance on corporate and macroeconomic levels.  The re-search elaborates on several key developments in M&A methodology and performance studies carried out in empirical works during the last two decades. The findings help to independently and objec-tively assess performance of M&A from a holistic perspective.

scholarly journals Post-Acquisition Performance of Emerging Market Firms: A Multi-Dimensional Analysis of Acquisitions in India

2021 ◽  
Vol 14 (12) ◽  
pp. 567
Author(s):  
Arindam Das
Keyword(s):  
Structural Equation ◽  
Emerging Market ◽  
Empirical Studies ◽  
Short Term ◽  
Firm Level ◽  
Acquisition Performance ◽  
Long Term Performance ◽  
Term Performance ◽  
A Performance

M&A performance is a multifaceted, compound construct with no overarching factor that captures all different dimensions. This paper examines the concept of acquisition performance and proposes a model that links firm-level factors and transaction parameters with firms’ short-term and long-term performance, extending to financial-, market- and innovation measures. Building on past empirical studies on the influence of various factors on M&A performance, a multi-dimensional structural equation model has been developed and it has been tested with a dataset on acquisitions in the Indian technology sector over a period of ten years. The results suggest that: (a) smaller acquirers with higher book value and leveraged firms demonstrate better long-term performance; (b) contrary to established understanding, short-term market returns are not influenced by deal parameters; (c) majority stake purchases show relatively lesser gains—suggesting the possible presence of post-acquisition integration issues and, (d) acquirers with high intangible assets continue to do well on innovation performance post-acquisition. By indicating situations and conditions under which an acquisition would potentially lead to a performance gain for the acquirer, these results provide significant insight to practitioners pursuing M&As for growth opportunities.

scholarly journals Financial Constraints, Trade Mode Transition, and Global Value Chain Upgrading of Chinese Firms

2019 ◽  
Vol 11 (17) ◽  
pp. 4527 ◽  
Author(s):  
Lin Chen ◽  
Sumei Luo ◽  
Tian Zhao
Keyword(s):  
Value Chain ◽  
Financial Constraints ◽  
Empirical Studies ◽  
Value Added ◽  
Economic Transformation ◽  
Global Value Chain ◽  
Firm Level ◽  
Chinese Enterprises ◽  
Chinese Banks ◽  
Level Production

China is facing the serious problem of ‘low-end locking’ in the global value chain as it becomes deeply integrated into world trade. Deciphering how to upgrade Chinese enterprises’ positions in the global value chain is crucial to China’s economic transformation and sustainable development. This study explores the feasibility of upgrading China’s global value chain from the perspective of financial constraints. Based on a theoretical framework, this study applies firm-level production data and trade data, using a documented method of measuring domestic value added at the firm level. Besides, we apply three methods to comprehensively measure the financial constraints faced by enterprises. In our study, we verify the findings of previous empirical studies that reducing financial constraints can significantly increase enterprises’ domestic value added, and this conclusion remains valid after considering various robustness tests. Our heterogeneity analysis indicates that easing financial constraints can significantly contribute to Chinese private enterprises’ upgrade in the global value chain, which could be related with “ownership discrimination” of Chinese banks. Finally, this study analyses the two mechanisms by which relaxing financial constraints could promote global value chain upgrading: (i) directly transfer enterprises’ trade mode from processing trade to general trade and (ii) allowing enterprises to climb up in the global value chain.

Cross-impact of leverage and firm performance: developed vs frontier bank-based economies

2019 ◽  
Vol 45 (8) ◽  
pp. 982-1000 ◽  
Author(s):  
Sibanjan Mishra ◽  
Ranjan Dasgupta
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Empirical Studies ◽  
Order Theory ◽  
Simultaneous Equation ◽  
Equation Modeling ◽  
Firm Level ◽  
Content Type ◽  
The Cross ◽  
And Performance

Purpose The purpose of this paper is to investigate the cross-impact of leverage and performance for firms operating in the developed and frontier bank-based economies. Design/methodology/approach This study uses annual panel data for a sample of 400 firms over a period of 27 years from 1990 to 2016. The sample sample firms consist of developed, Germany, France and Japan, and frontier including Argentina and Sri Lanka bank-based economies firms. The authors employ a simultaneous equation modeling consisting of two equations estimated using the two-stage least squares procedure to examine the cross-relationships between leverage and performance after controlling for other firm-level variables like size, growth and liquidity. Findings The empirical results are presented in two sets. First, in the case of firms in the developed bank-based sample, the authors find a negative debt-to-performance relationship and a negative performance-to-debt relationship. This inconsistent negative debt–performance relationship implies that firms operating in these economies use debt beyond a threshold limit, which, in turn, increases agency issues between the managers and debt-holders, thereby influencing firm performance adversely. Second, for frontier economies firms, the authors find a positive debt-to-performance relationship in line with the “trade-off theory.” Furthermore, the authors find a negative performance-to-debt relationship for both sub-samples in line with the “pecking-order theory.” Originality/value The study is distinct from earlier empirical studies and contributes largely to the existing literature. First, it emphasizes whether financial leverage influences firm performance in bank-based economies as firms operating in such systems are exposed directly to the strict regulatory environment. Second, it investigates whether any reverse relationship emanating from firm performance to capital structure holds for firms of these countries. This issue, to the best of author knowledge, is unanswered in previous research, more specifically for developed and frontier bank-based economies. Moreover, the results are relevant, as firm managers, analysts and policymakers must consider the importance of such cross-debt-performance relationships, while determining the optimal capital structure, in the bank-based economies.

scholarly journals THE PERFORMANCE OF COCONUT SUPPLY CHAIN IN KUBU RAYA DISTRICT

2021 ◽  
Vol 14 (1) ◽  
pp. 47
Author(s):  
M. Alfaliansyah ◽  
Maswadi Maswadi
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Performance Measurement ◽  
Value Added ◽  
Added Value ◽  
Chain Management ◽  
The Poor ◽  
And Performance ◽  
Market Changes ◽  
A Performance

The particular problem of coconut in Kubu Raya Regency is the ongoing partnership with suppliers to meet dynamic market changes that have not been well established. Supply chain management has become an important matter in the coconut industry in Kubu Raya Regency. Measurement of the performance of the coconut industry supply chain in order to optimize the performance of the coconut supply chain in Kubu Raya Regency, so that the realization of an efficient and effective coconut supply chain. Measurement of added value is done using the Hayami method and performance measurement is done by the SCOR method. The result of value added analysis shows that the added value of coconut in the farmer level is 758 rupiah / fruit. Analysis of supply performance using the SCOR method shows the performance of each member of the supply chain. Farmers have a 72.3% performance value included in the category below average. Traders and collectors obtained a performance value of 55.7% included in the Poor category.

scholarly journals The Risk and Performance of Ethically Compliant Investment

2020 ◽  
pp. 70-75
Author(s):  
Hidayah Bakar ◽  
Juliana Arifin ◽  
Norizan Remli
Keyword(s):  
Methodological Approach ◽  
Empirical Studies ◽  
Ethical Investment ◽  
Socially Responsible ◽  
Firm Level ◽  
Screening Criteria ◽  
Social Perspectives ◽  
Socially Responsible Investments ◽  
Prior Literature ◽  
And Performance

This paper presents a discussion of prior literature on the risk and performance of ethically compliant equity. This review of literature provides an organised evaluation of the available studies in ethical investment. In particular, this paper presents surveys of literature concerning shariah-compliant equity and socially responsible investments. The discussion of the literature synthesises the information in the respective studies into a summary. Each subsection provides an analysis of the information gathered by first providing an overview of the current empirical studies and, second, identifying gaps and showing the limitation of theoretical views in the existing studies. Discussion in previous literature emphases only one type of ethical investment, however, this paper, on the other hand, covers both the religious and social perspectives of ethics, which provide a more comprehensive view of ethics. The paper finds out that studies on the risk and performance of ethically compliant investment report mixed results. This is due to the disparities in the research methodological approach. However, it is almost unanimous that ethical funds demonstrate higher stability (lower risk) during the financial crisis and tend to outperform the conventional funds during this state of financial uncertainty. Future studies can conduct more firm-level analysis and integrates both screening criteria (shariah and socially responsible screening) to reconcile the results.   

scholarly journals The influence of the Washington Consensus programme on the transitional economies of Eastern Europe - a firm-level analysis

2020 ◽  
Vol 65 (226) ◽  
pp. 9-44
Author(s):  
Peter Howard-Jones ◽  
Jens Hölscher
Keyword(s):  
Market Failure ◽  
Value Added ◽  
Washington Consensus ◽  
The European Union ◽  
Production Networks ◽  
Productivity Improvement ◽  
Firm Level ◽  
International Production ◽  
National Welfare ◽  
And Performance

This research explores the effectiveness of the Washington Consensus (WC) programme as a mechanism for improving national welfare in transition and emerging economies, using its internalisation by the European Union (EU) as a proxy. The results indicate that there is a positive benefit to firms with accession to the EU, leading to greater productivity improvement and performance advantages than in non-member states. Foreign direct investment directly benefitted those firms that became investees, with little evidence of spillovers to domestic companies. The vertical nature of the investment, with an emphasis on international production networks that utilise significant levels of foreign inputs, infers protection of intellectual property and a reduction in value added, with results indicating a failure to achieve an export multiplier. There is evidence of substantial benefits accruing to firms in receipt of loans, but the apparent paucity of their availability may imply market failure. The gains made by innovative firms do not appear to do justice to the initiatives undertaken and may indicate a dilution of national innovative capacity.

scholarly journals Investment and performance of firms: Correlation or causality?

2008 ◽  
Vol 6 (2) ◽  
pp. 268-282 ◽  
Author(s):  
Almas Heshmati ◽  
Hans Lööf
Keyword(s):  
Performance Indicators ◽  
Value Added ◽  
Physical Capital ◽  
Significant Heterogeneity ◽  
Firm Level ◽  
Vector Autoregressive ◽  
Performance Variables ◽  
Show Evidence ◽  
And Performance ◽  
Performance Behavior

This paper provides an empirical analysis of the two-way causal relationship between investment and performance indicators at the firm level. The performance variables include sales, value added, profit, cash flow, capital structure and employment. The investment variables are research and development and physical capital. A multivariate vector autoregressive approach is applied to a panel of Swedish firms observed between 1992 and 2000. Results show evidence of some two-way causal relationships, which are mainly transitory in character. Significant heterogeneity is observed in the firms’ investment and performance behavior by their size.

scholarly journals Structural Relationship and Influence between Open Innovation Capacities and Performances

2018 ◽  
Vol 10 (8) ◽  
pp. 2787 ◽  
Author(s):  
Kwangsoo Shin ◽  
Eungdo Kim ◽  
EuiSeob Jeong
Keyword(s):  
Knowledge Management ◽  
Financial Performance ◽  
Technological Innovation ◽  
Open Innovation ◽  
Empirical Studies ◽  
Firm Level ◽  
Balanced Development ◽  
Absorptive Capacities ◽  
Managerial Implications ◽  
And Performance

Previous studies related to open innovation have presented piecewise implications in relation to various knowledge management capacities. The study published by Lichtenthaler and Lichtenthaler in 2009 presented a model that combines the various open innovation capacities of firms in view of a mix of knowledge management, dynamic capability and absorptive capacity. Despite these efforts, there have been few empirical studies on the relationships among capacities, or between capacities and performance from an integrated perspective. Therefore, this study seeks to clarify the relationships among knowledge capacities and between knowledge capacities, technological innovation and financial performance at the firm level. Our findings are that the transformative, connective, inventive and absorptive capacities both directly and indirectly affects technological innovation performance; and innovative and desorptive capacities are the key factors connecting technological innovation to financial performance. This study provides managerial implications for the balanced development of the various knowledge capacities and the improvement of technological innovation and financial performance for firm knowledge managers.

scholarly journals Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France

2019 ◽  
Vol 11 (1) ◽  
pp. 38-63 ◽  
Author(s):  
Youssef Benzarti ◽  
Dorian Carloni
Keyword(s):  
Value Added ◽  
Consumption Tax ◽  
Difference In Differences ◽  
Firm Level ◽  
Employment Effects ◽  
Level Data ◽  
Price Effects ◽  
Firm Level Data ◽  
Material Goods ◽  
Firm Owners

This paper evaluates the incidence of a large cut in value-added taxes (VATs) for French sit-down restaurants in 2009. In contrast to previous studies, which only focus on the price effects of VAT reforms, we estimate the effects of the VAT cut on four groups: workers, firm owners, consumers, and suppliers of material goods. Using a difference-in-differences strategy on firm-level data, we find that: firm owners pocketed more than 55 percent of the VAT cut; consumers, sellers of material goods, and employees shared the remaining windfall with consumers benefiting the least; and the employment effects were limited. (JEL H22, H25, L83)

scholarly journals Women’s Economic Empowerment in Vietnam: Performance and Constraints of Female-Led Manufacturing SMEs

2021 ◽  
Vol 14 (6) ◽  
pp. 255
Author(s):  
MinhTam Bui ◽  
Trinh Q. Long
Keyword(s):  
Labor Productivity ◽  
Small And Medium Enterprises ◽  
Manufacturing Sector ◽  
Value Added ◽  
Medium Size ◽  
Formal Sector ◽  
Firm Level ◽  
Average Value ◽  
Significant Difference ◽  
Medium Enterprises

This paper identifies whether there was a performance difference among micro, small and medium enterprises (MSMEs) led by men and by women in Vietnam during the period 2005–2013 and aims to provide explanations for the differences, if any, in various performance indicators. The paper adopts a quantitative approach using a firm-level panel dataset in the manufacturing sector in 10 provinces/cities in Vietnam in five waves from 2005 to 2013. Fixed effect models are estimated to examine the influence of firm variables and demographic, human capital characteristics of owners/managers on firms’ value added, labor productivity and employment creation. We found that men led MSMEs did not outperform those led by women on average. Although the average value added was lower for female-led firms in the informal sector, the opposite was true in the formal sector where women tend to lead medium-size firms with higher value added and labor productivity. The performance disparity was more envisaged across levels of formality and less clear from a gender perspective. Moreover, while firms owned by businessmen seemed to create more jobs, firms owned by women had a higher share of female employees. No significant difference in business constraints faced by women and by men was found.

Sign in / Sign up

Export Citation Format

Share Document