The role of mergers and acquisitions in mitigating the effects of corporate fraud in the pharmaceutical sector

Mark Eshwar Lokanan and Shenon Augustine Fernandes

Journal of Financial Crime, 2021, vol. 29, issue 1, 4-19

Abstract: Purpose - In today’s highly comparative pharmaceutical sector, multiple humanitarian and pricing issues are prevalent within the industry. Mergers and acquisitions (M&A) are perceived to be an essential method for organizational consolidation and value generation. The purpose of this paper is to illustrate via descriptive methodology andt-tests, how a merger can mitigate the effects of fraud in the pharmaceutical sector. Design/methodology/approach - The research focuses on secondary data. This research paper explores the differences in these organizations’ financial metrics using thet-test regression analysis, both pre and post-merger. Secondary data have been used to compile separate financial ratios for five years before and five years after the scandal. Findings - The results indicate a positive outlook for both organizations after the merger. Mergers appear to have a favorable impact on the performance of a company, with the only exception of external variables (laws, controversies, fines, etc.) affecting its post-merger performance. Originality/value - The paper uses secondary data to test the impact that mergers have on pharmaceutical companies after they have been implicated in corporate malfeasance.

Keywords: Financial performance; Fraud; Mergers; T-test (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-12-2020-0243

DOI: 10.1108/JFC-12-2020-0243

Access Statistics for this article

Journal of Financial Crime is currently edited by Dr Li Hong Xing and Prof Barry Rider

More articles in Journal of Financial Crime from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().