EconPapers    
Economics at your fingertips  
 

Pre-evaluating efficiency gains from potential mergers and acquisitions based on the resampling DEA approach: Evidence from China's railway sector

Xue-jie Bai, Jin Zeng and Yung-Ho Chiu ()

Transport Policy, 2019, vol. 76, issue C, 46-56

Abstract: This study combines resampling DEA and the potential merger gains model to pre-evaluate the efficiency gains of three representative M&A schemes (i.e. regional M&A, megamerger, and a coalition between ‘strong’ and ‘weak’ railway bureaus) for China's railway sector over the period 2011–2015. The results reveal that geographically meaningful M&As are better than the other two types in creating efficiency gains due to the special characteristic of the railway sector – network economics. The timing of M&As and the roles and endowments of the railway bureaus must also be considered before any merger. A proper M&A can produce a so-called ‘stimulant’ effect in the short run, but as the ‘stimulant's efficacy’ becomes exhausted over time, the M&A's effect will gradually turn weak. At this time, it is particularly important for policy-makers to introduce a series of desirable institutions. Finally, our empirical findings also support the view that an M&A between two (efficient or not) DMUs does not ensure positive efficiency gains.

Keywords: Resampling DEA; Virtual M&As; Potential efficiency gains; Railway bureaus (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0967070X18305365
Full text for ScienceDirect subscribers only

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:eee:trapol:v:76:y:2019:i:c:p:46-56

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

Access Statistics for this article

Transport Policy is currently edited by Y. Hayashi

More articles in Transport Policy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-07-20
Handle: RePEc:eee:trapol:v:76:y:2019:i:c:p:46-56