 The Effects of M&A on Corporate Performance in Japan:DID Analysis in the Era of Corporate Governance ReformAkira Fukuda Japan and the World Economy, 2020, vol. 55, issue C Abstract: This study analyzes how mergers and acquisitions (M&A) affect the performance of acquired companies in Japan. The sample period includes the era in which the government of Japan promoted a series of corporate governance reforms. A difference-in-differences analysis is implemented to eliminate the endogenous effects of a corporate acquisition. Choosing a control group by propensity score matching, we find that acquisitions have significantly negative effects on employment but no significant effects on labor productivity. For acquisitions by Japanese companies, we also find no significant improvement in ROA but significant improvement in Tobin’s q. The results are consistent with the zombie company theory, which indicates that an M&A prolongs the life of an insolvent company. Acquisitions by Japanese companies are in contrast with those by foreign companies, which have positive effects on ROA. Keywords: M&A; Corporate governance; Zombie firms; Labor adjustment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:55:y:2020:i:c:s0922142520300141 DOI: 10.1016/j.japwor.2020.101013 Access Statistics for this article Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao More articles in Japan and the World Economy from Elsevier |
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