Search Results (36)

This study analyzes the short-term capital market wealth effects of acquiring companies in India. The study has taken 449 cases of merger and acquisition announcement effects on shareholder wealth by using multiple models, including the market model, CAPM, and matched firm analysis. This study documents that the acquiring firm generates a positive and significant return in the pre-announcement period, suggesting possible market anticipation or possible market reaction, and that the acquiring firm tends to be negative in the post-announcement period. We also find that shareholder wealth is eroded by acquiring firms during the announcement period. These results are consistent with agency theory, which explains how managerial motivations and information asymmetries contribute to the observed erosion of shareholder wealth around M&A announcements, and signaling theory, which suggests that market reactions reflect investors’ interpretations of the quality of the signals. The results of this study point towards improving transparency and compliance standards in the case of Indian M&As, which can help in preventing speculative trading and information asymmetry, which can skew market reactions. The results also highlight the importance of adopting rigorous due diligence and enhanced transparency procedures by firms regarding the strategic rationale for mergers, which could help mitigate negative post-announcement returns and market skepticism. Full article

The rise of fintech has disrupted traditional financial services, prompting banks and asset managers to respond strategically, often through mergers and acquisitions. This study investigates the short-term market reaction to M&A announcements involving fintech targets by incumbent financial institutions. Using an event study methodology centered on different event windows and cumulative abnormal returns computed via the market model, the analysis incorporates regression models with bidder-, deal-, and target-level variables to identify the drivers of performance. The results show that, on average, financial institutions experience negative abnormal returns around announcement dates, suggesting limited short-term value creation. Higher market-to-book ratios and tax rates are positively associated with CARs, while lower profit margins are linked to better market reactions. Subsample comparisons reveal that U.S. acquirers underperform their European peers, commercial banks fare worse than asset managers and investment banks, and pre-COVID-19 deals yield more favorable returns than post-COVID-19 ones. Robustness checks using different market benchmarks demonstrate that key patterns—especially those related to geography and timing—are sensitive to benchmark selection. Overall, this study highlights market skepticism toward fintech acquisitions by traditional financial institutions, particularly in specific contexts, and emphasizes the importance of controlling for structural factors when interpreting abnormal returns. Full article

Strategic mergers and acquisitions (M&A) can support sustainable business models by enabling firms to adapt their capabilities and competitive positions as conditions change. This study examines how target listing status (public vs. private) and acquirer size shape short-term shareholder wealth in Korean SMEs (Small- and medium-sized enterprise), and links announcement reactions to subsequent operating outcomes. Using an event study and multivariate regressions on 155 M&A announcements by KOSDAQ-listed SMEs (Korean Securities Dealers Automated Quotations) (2016–2020), we find that smaller acquirers earn significantly higher announcement-period cumulative abnormal returns (CAR)—i.e., smaller firm size is positively associated with superior market-adjusted performance around M&A events. Although acquisitions of privately held targets and diversifying deals show higher unadjusted means, their effects become statistically insignificant once firm fundamentals and size are controlled for. To connect M&A strategy with business-model sustainability, we operationalize sustainability as the alignment between short-term market expectations (CAR) and realized operating performance over 1–2 years, measured by return on operating cash flow (ROCF); medium-term checks indicate that the short-run “size effect” attenuates, underscoring the role of execution and scale in longer-run outcomes. Overall, the evidence highlights the primacy of firm-specific fundamentals, strategic fit, and integration capacity in guiding M&A decisions that advance both near-term performance and longer-term resilience. The Korean SME setting—marked by concentrated ownership, resource constraints, and a chaebol-influenced market and policy environment—provides a stringent context for these tests. Full article

This paper develops a dual-channel environmental hotel supply chain equilibrium model to investigate the impact of mergers and acquisitions (M&A), decision makers’ altruistic preferences, and consumers’ low-carbon preferences under demand uncertainty. The model incorporates hotels, online travel agency (OTA) platforms, and demand markets and captures interactions under both the merchant and agency models. Variational inequalities are employed to describe interdependent decision-making behaviors, and the projection gradient algorithm is used to obtain equilibrium solutions. The numerical analysis reveals that sustainability factors directly affect the profitability of both hotels and OTAs. Under the agency model, higher commission rates reduce hotel profits while significantly increasing OTA gains. When comparing the merchant and agency models without M&A, the merchant model yields higher hotel profits, whereas the agency model favors OTAs. Furthermore, when M&A is combined with altruistic preferences, the utility of hotels and OTAs under the agency model reaches the highest level, while M&A offers limited advantages for OTAs. Overall, the findings highlight that sustainability factors, altruistic preferences, and M&A jointly interact with merchant and agency governance structures to shape profitability and utility. These results provide theoretical insights and managerial implications for developing resilient, cooperative, and low-carbon hotel supply chains under demand uncertainty. Full article

In this study, we examine the impact of mergers and acquisitions (M&As) on firm environmental performance, aiming to address the gap in research and guide firms, investors, and policymakers toward more environmentally conscious decision-making in M&A. Using panel data from Chinese A-share listed firms (2008–2022), we estimate a two-way fixed effect model. The Propensity Score Matching and the instrumental variable method address potential endogeneity concerns, and robustness checks validate the findings. We found that M&As have a significantly positive effect on firm environmental performance, with heterogeneous impacts across regions, industries, and M&A types. The environmental benefits are most pronounced in heavily polluting industries and hybrid M&A deals. Eastern China shows more modest improvements. The results of mechanism tests revealed that M&As enhance environmental performance primarily by boosting total factor productivity and fostering innovation. This study offers a novel perspective by linking M&A activities to environmental sustainability, enriching the literature on both M&As and corporate environmental performance. We show that even conventional M&A deals (not sustainability-focused) can improve environmental performance through operational synergies. Expanding beyond polluting industries, we reveal how sector characteristics shape M&A’s environmental impacts. We identify practical mechanisms through which standard M&A activities can advance sustainability goals, helping firms balance economic and environmental objectives. It provides empirical evidence from China, an emerging market with distinct institutional and regulatory contexts. The findings offer guidance for firms engaging in M&A to strategically improve sustainability performance. Policymakers can leverage these insights to design incentives for M&A in pollution-intensive industries, aligning economic growth with environmental goals. By demonstrating that M&As can enhance environmental outcomes, this study supports the potential for market-driven mechanisms to contribute to broader societal sustainability objectives, such as reduced industrial pollution and greener production practices. Full article

Purpose: The acquirer’s corporate environmental performance (CEP) in mergers and acquisitions has been a subject of debate, yielding mixed results. This paper uses the US firm-level data of 1437 M&A deals from 2002–2019 to examine the impact of overall CEP, resource use, emissions, and innovation on the acquirers’ post-merger market value. Design/methodology/approach: This study employs multi-level fixed effects panel regression using Ordinary Least Squares (OLS) and the instrumental variable (IV) 2SLS method to estimate the models and compare the results with those from robust estimation. Absorbing the multiple levels of fixed effects (i.e., firm, industry, and year) offers a novel and robust algorithm for efficiently accounting for unobserved heterogeneity. The results from IV (2SLS) are more convincing, as the method overcomes the problem of endogeneity due to reverse causality and sample selection bias. Findings: The authors find that CEP has a significant impact on market value, particularly in the long term. While both resource use and emissions performance have positive effects, emissions performance has a stronger impact, presumably because external stakeholders and market participants are more concerned about emissions reduction. The performance of environmental innovation is relatively weak compared to other pillars. Descriptive analysis shows low average scores in environmental innovation compared to the resource use and emissions performance of the acquirers. However, large deals yield significant returns from investing in environmental innovation in both the short and long term compared to small deals. Practical implications: This paper offers several practical implications. First, environmental performance can help improve the acquirer’s long-term market value. Second, managers can focus on the strategic side of environmental performance, based on its pillars, and benchmark their relative position against peers. Third, environmental innovation can be considered a new potential, as the market as a whole in this area is still lagging. Given the growing pressure to improve environmental technology and innovation, prospective acquirers should confidently prioritise actions on green revenue, product innovation, and capital expenditure now rather than ticking these boxes later. Originality value: The key contribution is offering valuable insights into the impact of acquirers’ environmental performance on long-term value creation in mergers and acquisitions (M&A). These results fill the gap in the literature focusing mainly on the effect of environmental pillar and sub-pillar scores on acquirer’s firm value. The authors claim that analysing sub-pillar-level granularity is crucial for accurately measuring the effects on firm-level performance. Full article

The purpose of this study was to establish a spatial structural framework to explore how cross-border mergers and acquisitions (M&As) in emerging markets can enhance long-term productivity and select the appropriate host country market structures. Utilizing cross-border M&A data from Chinese companies from 2008 to 2016, we developed a moderated U-shaped mediation model. Employing Two-Stage Least Squares and the Generalized Method of Moments for endogeneity analysis, we offer robust empirical insights. Our findings illustrate that enterprise productivity progression from cross-border M&As is significantly influenced by a U-shaped mediation of the host country’s market size effect, which is further moderated by the technological distance between the home and host countries. A high technological distance intensifies the U-shaped mediation of market size effects on enterprise productivity, while low technological distances result in an inverted U-shaped curve, indicating that such markets may boost short-term productivity but limit long-term growth. Conversely, larger markets with greater technological distances better support sustained productivity increases, even requiring persistent technological absorption efforts. This study underscores the necessity of selecting appropriate host country market structures and effectively managing the acquisition timeline to positively impact both short- and long-term productivity. By conceptualizing firm-level technological absorption efforts as the technological gap between the home and host countries, this study highlights the crucial moderating role that the technological gap plays in influencing long-term productivity at the macro level, providing new insights into the economic geographic strategic decisions and spatial planning for emerging market enterprises in cross-border acquisitions. Full article

Since the 1990s, market liberalization of the electricity industry has advanced all around the world. To survive in the drastically changing business environment, incumbent electric utility companies have conducted operational reforms, including Mergers and Acquisitions (M&As), to enhance and/or complement existing business capabilities. The purpose of this study was to measure the operational efficiencies of 31 of the world’s largest electric utility companies using data from 2010 to 2020 and examine regional differences in and the impacts of M&As on the efficiencies. For this purpose, we applied a new type of Data Envelopment Analysis (DEA) and Tobit model regression. We provide findings from the empirical analyses and discuss the business implications of M&As for electric utility companies. The operational efficiency measures were different among regions, but did not show statistically significant changes over the study period from 2010 to 2020. Furthermore, the results of regression analyses indicate that the increasing number of M&A buying transactions and M&A total transactions has a negative marginal impact on the operational efficiency or leads to a lower operational efficiency for utility companies. Since electricity utility companies have not received gains in operational efficiency from increasing the number of M&A transactions, they need to be more cautious about whether M&A transactions can provide value to the operation and technology management. Full article

In the context of global competition, enterprises are increasingly adopting technology mergers and acquisitions (M&As) as a strategic approach to enhance their sustainable competitiveness. This study investigates the impact of technology M&As on the sustainable competitiveness of enterprises, focusing on Chinese A-share listed companies from 2007 to 2021. Employing a staggered difference-in-difference (DID) model for empirical analysis, the findings reveal that technology M&As significantly boost the sustainable competitiveness of enterprises by 6.2% compared to non-technology M&A firms. Moreover, the study employs a mediation effect model to demonstrate that technology M&As contribute to improved enterprise productivity levels and market power. Heterogeneity analysis further indicates that the positive effects are more pronounced in firms with a strong ESG performance and those with lower levels of digital development. The study offers valuable insights for corporate strategic planning and policy-making, emphasizing the role of technology M&As in fostering enterprise sustainability and competitiveness. Full article

Utilising panel data from Chinese listed companies between 2008 and 2020, this study employs propensity score matching (PSM) in conjunction with a multi-temporal difference-in-differences (DID) model to examine the causal impacts of cross-border mergers and acquisitions (M&As) on the organisational resilience of enterprises. The findings reveal that while cross-border M&As augment company risk-taking and short-term financial volatility, they also bolster long-term growth, thereby enhancing overall organisational resilience. Cross-border M&As are particularly beneficial for bolstering organisational resilience in state-owned enterprises, non-manufacturing firms, and companies located in the eastern and central regions of China. Moreover, adhering to the principles of corporate social responsibility and possessing substantial market power are found to enhance the impact of cross-border M&As on organisational resilience. The results of this research hold important practical implications for companies seeking to improve organisational resilience and achieve sustainable development. Full article

As both investment attraction and mergers and acquisitions targeting information technology and platform companies are becoming more important in the digital-centric economic environment, interest in valuing corporate data assets is increasing. Accordingly, among the income approaches used in business valuation, this study presents a data valuation model based on discounted cash flow. This model is expected to be useful for corporate investment decision-making. The assumptions used in this study for the estimation of data income include intangible asset value, exclude net asset value, and data attribution is centered on technology, human resources, and market factors. In particular, data attribution accounts comprise ordinary data research and development, data labor costs, and data advertising expenses. Data costs were divided into those incurred during collection, storage, curation, analysis, and utilization. Financial statements and related data from a real estate information platform operator over three years were collected and used to simulate the data valuation model. The simulation reveals that the operator possesses KRW 472.6 billion in data assets. Ultimately, the data valuation model developed in this study can contribute to strengthening platform operators’ investment attraction, guaranteeing financial sustainability, and transparency and data assetization. Full article

Organizational models for corporate horizontal merger based on partnership, mutual benefit and synergy could act as a driver and a “window of opportunity” for companies seeking to combine the objectives of economic resilience, technological independence and compliance with the environmental, social and governance principles. This article proposes an approach to analyzing the potentials of enterprises and actors in terms of collaboration maturity and evaluation thereof for the potential formation of industrial symbioses and industrial innovation ecosystems. The authors’ proposals have been tested when assessing collaboration maturity of the participants in the industrial symbiosis for phosphogypsum recycling, as well as when assessing collaboration maturity of the actors in Safer Phosphates industrial innovation ecosystem. The development of collaboration between enterprises through an increase in the number of joint innovative technological and environmental projects tends to develop into industrial ecosystems, when knowledge about new produced or promising options for the exchange of resources will be transferred between regional enterprises and attract new actors from other territories and sectors of the economy. Such interaction will provide a long-term development strategy for each actor, and commercial and image benefits will make ecosystem symbiotic interaction a priority for all market participants. Full article

A macro policy environment affects managers’ decision-making behaviors. When there is greater uncertainty in economic policy, will they engage in extreme violations? This paper explores the economic consequences of policy uncertainty at the firm level from the perspective of corporate fraud. We focus on the fraudulent behaviors of listed companies in the Chinese capital market and conduct our empirical research through the multiple mediation model. The results show that economic policy uncertainty not only has a direct effect on corporate fraud but it also has a mediating effect that can be explained by four mediating variables. Increased economic policy uncertainty will increase the likelihood of company fraud, and this direct effect will vary due to corporate heterogeneity. Companies with a lower risk tolerance and productive capacity will be more affected and have more significant violation motives. From the results of the mediating effect test, we determine that increased economic policy uncertainty increases mergers and acquisitions, decreases cash holdings, increases stock price volatility, and decreases institutional investors’ shareholdings, which will increase the possibility of corporate fraud. Full article

Mergers and acquisitions (M&A) may serve as a catalyst in energy transition by accelerating this trend and “greenwashing” the deals. M&A are often used by large energy companies as a tool to explore potential synergy benefits. Recently, M&A strategies in the energy industry have been pursued to transform traditional business models into more “sustainable” models. On the one hand, it may be observed that companies are taking a proactive rather than reactive approach towards environmental-, social-, and governance (ESG)-related M&A deals. On the other hand, sustainable M&A deals do not interest activist shareholders and regulatory authorities only anymore. Inclusion of a sustainability framework and managing ESG-related risks have become part of the overall strategy of most companies within the energy industry. This research addresses the problem of how energy M&A are contributing to sustainable development on the one hand and reflecting sustainable developments on the other hand. The current research focuses on the systematic literature on the M&A deals in the energy industry through the lens of sustainability by applying the SALSA methodology. Further, we applied a SWOT analysis of M&A in the energy industry from the perspective of sustainable development. Thomson Reuters DataStream 5.1 database was used for developing a case study. A sample of Lithuanian, Latvian, and Estonian energy companies that were involved as acquirers or targets in the M&A events from 1995 to 2020 was developed. Establishing a methodological approach construed of SALSA, SWOT, and case study analyses allowed us to bridge a gap in the existing literature and provoke further discussion in regards to market developments through the lens of sustainable development. The research results showed that there are relatively few M&A of renewable companies as the M&A market is dominated by traditional energy companies within Baltic states. However, companies in the Baltic states are pursuing energy security, have set targets for emission reductions, renewables and energy efficiency, are supporting EU climate neutrality, and put great emphasis on climate change mitigation. Full article

(1) Background: comprehending market concentration and its implications is one of the most crucial aspects of studying and evaluating competition issues, and this is gaining increasing attention in companies’ sustainability research. Sustainability in the manufacturing industry refers to a company’s ability to continue operations over the long term. A manufacturing business must be able to ensure that it will have appropriate resources, labor, and consumers for its products well into the distant future in order to remain economically viable. At this time, market competition concentration influence is significant. The purpose of this article is to assess the viability of measuring the HHI in the implementation of business strategies in order to prevent market distortions in the manufacturing industry. (2) Methods: the distinguishing aspect of this paper is that it describes the capabilities of the fuzzy VIKOR approach for evaluating the HHI in order to avoid market distortion by studying the most important economic characteristics of the manufacturing market. (3) Results: the contribution of this study is the compilation of the HHI evaluation system in the manufacturing sector, with the goal of identifying the market conditions of corporate entities and facilitating the attainment of long-term market competitiveness. (4) Conclusions: a comparison of the multicriteria techniques approach and probability theories reveals that the industrial sector’s HHI-based performance may be measured. It is more adaptable to the organization’s actual decision-making procedure. The operation of manufacturing businesses in the market with the least amount of distortion can be significant for enhancing competitiveness not only at the national level, but also at the global level, particularly by enhancing reputation, reducing costs, responding to market demands, and adapting to market demands. The findings will be relevant for policymakers tasked with controlling market inefficiencies and fostering sustainable economic initiatives. Full article