The Institutional Roots of M&A Success: Evidence from European Business Environments

Irina Chiriac and Valentina Diana Rusu ()
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Irina Chiriac: Accounting, Business Information Systems and Statistics Department, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 700505 Iasi, Romania
Valentina Diana Rusu: Social Sciences and Humanities Research Department, Institute of Interdisciplinary Research, Alexandru Ioan Cuza University, 700107 Iasi, Romania

Administrative Sciences, 2025, vol. 15, issue 7, 1-26

Abstract: This study investigates the relationship between the business environment and the financial performance of companies engaged in mergers and acquisitions (M&As), with a particular emphasis on how “ease of doing business” (EDB) indicators affect post-merger outcomes, as measured by return on assets (ROA), return on equity (ROE), and profit margin (PM). We consider a sample of 230 firms from fifteen European countries (Bulgaria, Cyprus, Denmark, France, Greece, Hungary, Italy, Germany, Lithuania, The Netherlands, Norway, Poland, Romania, Slovakia, and Spain) grouped according to COFACE criteria for five years (2015–2019). By applying panel data methods, the research highlights that, three years after the merger in low-risk countries, there is an increase in return on equity, better asset recovery, and economies of scale, largely due to effective government policies. The study highlights the differentiated effects of specific EDB sub-indicators, providing insight into how tailored regulatory frameworks can enhance M&A success across varying economic contexts. The business environment can stimulate the performance of firms after mergers and acquisitions if the regulations are friendly to the firms and are adapted to the state of the country’s economy.

Keywords: ease of doing business; government measures; mergers and acquisitions; ROE; ROA; profit margin (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2025
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