 Effects of target firm's inventory turnover on post-merger and acquisition performanceBowon Kim, Jaeseok Na and Sunghak Kim International Journal of Applied Management Science, 2018, vol. 10, issue 3, 173-191 Abstract: Firms use merger and acquisition (M%A) as a strategic tool to restructure their business. We explore the factors that determine the success of M%A in manufacturing. The literature has highlighted financial variables as success factors. However the literatures have not considered how operational factors of target firm have effects on the post-M%A performance of the buyer firm. Thus, we hypothesise that operational factors of the target firm also affect the M%A performance. In particular, we look into three different types of inventory, i.e., raw material, work-in-process, and finished goods, simultaneously. Then, we put forth that the turnover of the target firm's work-in-process inventory, which directly reflects its operational efficiency, is the most important factor. Thus, we conclude that in addition to financial factors, the target firm's operational efficiency determines the M%A performance. We elaborate on the analysis results and discuss economic as well as managerial implications. Keywords: work-in-process inventory; merger and acquisition; M%A; return on assets; ROA; inventory turnover; target firm; post-merger and acquisition performance. (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:ids:injams:v:10:y:2018:i:3:p:173-191 Access Statistics for this article More articles in International Journal of Applied Management Science from Inderscience Enterprises Ltd |
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