Open AccessCreating value through related and unrelated merger and acquisition: Empirical evidence
Author(s) -
I. D. Gupta,
T. V. Raman,
Naliniprava Tripathy
Publication year - 2021
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv18i4art5
Subject(s) - logistic regression , context (archaeology) , categorical variable , outcome (game theory) , value (mathematics) , sample (material) , empirical research , empirical evidence , business , econometrics , economics , actuarial science , statistics , microeconomics , mathematics , biology , paleontology , philosophy , chemistry , epistemology , chromatography
The main objective of this paper is to examine the impact of related/unrelated merger and acquisition (M&A) on value creation and research and development (R&D) of Indian non-financial sector companies. This study focuses on whether related M&A outperforms unrelated M&A in the context of value creation and R&D. The sample of the study includes 64 companies to evaluate the significance of relatedness and unrelatedness between target and acquiring companies of the Indian non-financial sector using panel data from the period from 2015 to 2020. The study employs a logistic regression model, which is a predictive model employed wherein the response variable is categorical. The idea of logistic regression is to establish a relationship between variables and the probability of a given outcome. The results of our outcome reveal that partner familiarity affects the post-acquisition value creation and R&D. Further, the findings of the study acclaim that related M&A outperform unrelated M&A. The study indicates that related M&A create positive value but influence negatively to R&D. The findings of the study have several implications for the managers and policymakers who need to understand the dynamics of related/unrelated mergers to take a valid judgment before making merger and acquisition decisions