Cross-Industry M&A and Target Output: Impact on Acquirors’ Performance

Yiyan Hu ()
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Yiyan Hu: University of Connecticut Storrs

A chapter in New Perspectives and Paradigms in Applied Economics and Business, 2024, pp 191-204 from Springer

Abstract: Abstract Mergers and acquisitions (M&A) are highly significant economic activities. Despite the hundreds of academic studies investigating firm performance around and after an M&A, the targets’ characteristics which influence the consequences of a deal are still not well understood. Using OLS and double fixed effects models, we find that there are significant differences between acquirors and targets. Specifically, the acquirors’ earnings before interest, number of employees, PPE (property, plant and equipment) and sales/turnover are all significantly higher than those of the target. Besides, we also find that the size of the acquiror increases significantly after M&A. Most importantly, the cross-industry and output per capita of the targets affect the post-acquisition performance of acquirors significantly. Our study highlights the importance of target choice and M&A decision.

Keywords: M&A; Synergy; Performance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-49951-7_14

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DOI: 10.1007/978-3-031-49951-7_14

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