Factors affecting the Long-Term Post-Acquisition Performance of BRICS Firms Engaging in Cross-Border Mergers and Acquisitions

Damilola Oyetade (), Farai Kwenda () and Ralitza Dobreva ()
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Damilola Oyetade: University of KwaZulu-Natal
Farai Kwenda: University of KwaZulu-Natal
Ralitza Dobreva: University of KwaZulu-Natal

Acta Universitatis Danubius. OEconomica, 2017, issue 13(2), 220-233

Abstract: The purpose of the paper is to examine factors that affect the long-term performance of listed firms from Brazil, Russia, India, China and South Africa (BRICS) that engage in cross-border mergers and acquisitions. This paper adds to the existing literature on the performance of mergers and acquisitions from emerging economies by examining the performance of mergers and acquisitions activities on acquirers from individual BRICS countries and examining whether intra-BRICS acquisitions are more beneficial than non-BRICS acquisitions. The system generalised method of moments estimation technique was employed in order to control for unobservable heterogeneity and potential endogeneity problems using accounting data and merger deal information collected from the Bloomberg online database for the period January 2000 to December 2012.The results obtained indicate that there is persistence in the profits, suggesting that BRICS acquirers continue to profit as they engage in mergers and acquisitions, and firm size significantly impacts the profits of acquirers.

Keywords: leverage; profits; mergers; acquisitions; cross border (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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