How M&A Deals Influence Corporate Performance in Developed and Emerging Capital Markets: A Review of Empirical Results in the Literature

Ch. 2. P. 33–61.

Grigorieva S.

This chapter surveys the recent trends in the literature on the performance of M&A deals in developed and emerging capital markets. This literature is voluminous, diverse and challenging. We focus on the transactions within one country – domestic M&As – in particular focusing on the methods that the researchers use to estimate whether M&A deals promote efficiency gains or not. We discuss the research instruments which allow an assessment of the effects of M&As on firm operating performance and on firm value. Analysing the results of latest empirical studies we reveal that target shareholders gain significantly in M&A deals. The evidence suggests that in most cases acquiring shareholders receive negative or insignificant returns in the short-run in developed capital markets, while in emerging economies acquiring shareholders mostly gain in M&A deals. Operating performance analysis reveals mixed results in developed and emerging capital markets, while the analysis of papers which use value performance indicators show the destruction of company value due to M&As in developed and emerging capital markets. The review also analyses studies that examine the relationship between different methods.

Keywords: value creation, company performance, developed and emerging markets, mergers and acquisitions (M&A)

Publication based on the results of: ­­­System of corporate financial decisions of innovative companies: empirical analysis of developed and emerging capital markets (2018)

In book

Strategic Deals in Emerging Capital Markets. Are There Efficiency Gains for Firms in BRIC Countries?

Ivashkovskaya I., Grigorieva S. Switzerland: Springer, 2020.