Detecting Mergers and Acquisitions Effects on Performance, Efficiency, and Productivity with a Bootstrap Mixed Logit Approach: Evidence from Greece

Athanasios G. Tsagkanos

Applied Economics Quarterly (formerly: Konjunkturpolitik), 2010, vol. 56, issue 4, 317-341

Abstract: In this paper, we examine the effects on performance, efficiency, and productivity of horizontal and vertical mergers and acquisitions (M&As) in the Greek manufacturing sector during the period 1995 – 2002. The purpose is to determine whether M&As actually do enhance the value of acquired firms, thus offering synergy gains, or if they tend to be value-neutral or value-reducing. Taking into consideration the endogeneity of M&A decisions, we analyze the effects using the matching estimator approach, which is based on the estimated propensity score. We estimate the propensity score using a more recent econometric procedure: the Bootstrap Mixed Logit approach (BMXL, or Bootstrap Random Coefficients Logit Model), which captures observed and unobserved heterogeneity both within and between firms. The findings exhibit a significant improvement through BMXL in comparison to other models such as the simple Logit model and propensity score weighting. In general, the results provide evidence that acquisitions (both horizontal and vertical) tend to be value-reducing rather than value-neutral or value-enhancing. Additionally, contrary to previous studies, we find a considerable amount of acquisitions that are performed under managerial discipline motives.

Keywords: mergers and acquisitions effects; performance; efficiency and productivity; Bootstrap Mixed Logit (search for similar items in EconPapers)
JEL-codes: C51 G34 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.3790/aeq.56.4.317 (application/pdf)
Access to full text is restricted to subscribers (2008 onwards); Pay-per-view access from http://ejournals.duncker-humblot.de/loi/aeq or from http://www.genios.de (2006 onwards with 2 years moving wall)

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:aeq:aeqaeq:v56_y2010_i4_q4_p317-341

Ordering information: This journal article can be ordered from
http://www.duncker-h ... nomicsquarterly.html

Access Statistics for this article

Applied Economics Quarterly (formerly: Konjunkturpolitik) is currently edited by Ansgar Belke, Uwe Sunde and Winfried Koeniger

More articles in Applied Economics Quarterly (formerly: Konjunkturpolitik) from Duncker & Humblot, Berlin
Bibliographic data for series maintained by Deborah Anne Bowen ( this e-mail address is bad, please contact ).