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Characteristics of Acquirers and Targets in Domestic and Cross‐border Mergers and Aquisitions
Author(s) -
Liu Qing,
Qiu Larry D.
Publication year - 2013
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12044
Subject(s) - profitability index , productivity , mergers and acquisitions , business , monetary economics , variety (cybernetics) , economics , finance , macroeconomics , artificial intelligence , computer science
Abstract To help understand mergers and acquisitions ( M & A s), this paper utilizes the most recent M & A data (1991–2007) to establish empirical facts on a variety of performance measures for M & A acquirers, targets, and non‐participants. Unlike the finance literature which mainly focuses on abnormal returns, our performance measures include firm size, technology, productivity, and profitability. Generally, in domestic M & A s, in cross‐border M & A s, in the pre‐merger period and in the post‐merger period, acquirers perform better than targets, whereas targets perform better than non‐participants. Firms' performance is improved after the M & A s. We also find that in the pre‐merger period, US firms that acquire foreign firms in developing countries are significantly better than those that acquire foreign firms in developed countries.