Open Conference Systems, ICQQMEAS2013

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A NOTE ON CORPORATE MERGERS, BUSINESS PERFORMANCE AND THE THEORY OF THE FIRM: EVIDENCE FROM GREEK ACQUIRING LISTED FIRMS
Walid Abu-Dayyeh, Alexandros Alexandrakis, Panagiotis Pantelidis, Panagiotis Serifis

Last modified: 2015-09-24

Abstract


This study examines the success of merger decision in Greece during the last years in accordance with some basic issues of the theory of the firm. According to this theory, several research conclusions can be specified, reviewed and categorized on a bi-fold basis: the neoclassical theories and the managerial theories. From this point of view, the events of mergers and acquisitions (M&As) that have been performed from all merger-involved firms listed on the Athens Stock Exchange (ASE) in the period from 2005 to 2007 are evaluated using accounting data (financial ratios); from them, after several constraints, the final sample of the study consists from thirty five acquiring Greek firms. The study employs a set of sixteen ratios, in order to measure firms‟ post-merger performance and to compare pre- and post-merger performance for three years before and after the M&As announcements (with data analysis from 2002 to 2010). Towards the above referred analysis from the theory of the firm, the impact of the size of the acquiring firms (according to the ASE categorization) to the business performance after the M&As events is evaluated. The results revealed that firstly, mergers have not any impact on the post-merger performance of the acquiring firms, and, secondly, concerning the impact of the size of the firm, there is evidence that large and medium sized firms presents better relative performance than smaller firms and thus, it could signalise that neoclassical theories -and not managerial theories, at least, for the larger firms- could be employed to explain these merger decisions of larger firms from this research sample

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