The Impact of M&A of Small and Medium-Sized Companies on Merger Disclosure Effect and Long-Term Operating Performance

Purpose – The purpose of this study is to conduct a comparative analysis of the long-term operating performance of family and non-family firms from the agency theoretic perspective. The analysis is focused on investigating the impact of family ownership on principal–agent conflicts of interest. Design/methodology/approach – This paper examines the relationship between firm operating performance and family ownership for a large sample of 677 Australian-listed companies. The paper uses the Generalised Method of Moments (GMM) estimator model developed by Arellano and Bond (1991) and used by other studies in finance (Baltagi, 2012; Bond, 2002; Mohamed et al., 2008). Findings – The empirical results show that firms with ownership concentration has a better operating performance due to the alignment of owner-management interests. This study also finds that family-listed companies have higher survival rates and perform better than non-family companies. Findings support the hypothesis that agency costs arise as a result of privileged access of information and self-interest behaviour of managers (outsiders) in firms with dispersed ownership structures. Originality/value – Earlier studies have only focused on short-term perspectives, particularly investigating small and medium types of Australian family businesses from narrow aspects, such as productivity, business behaviour, capital structure and leverage. Therefore, this paper has conducted a comparative examination of family and non-family firms listed on the Australian Stock Exchange (ASX) to identify the impact of agency costs on their financial performance.

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The impact of equitization on financial and operating performance of state-owned enterprises (SOEs) in Vietnam: An approach using propensity score matching

Science & Technology Development Journal - Economics - Law and Management ◽

10.32508/stdjelm.v4i2.631 ◽

2020 ◽

Vol 4 (2) ◽

pp. First

Author(s):

Nguyen Van Tan

Keyword(s):

Large Scale ◽

Operating Performance ◽

Comparison Method ◽

Average Treatment Effect ◽

Operating Efficiency ◽

Investment Strategies ◽

Industry Group ◽

Using Data ◽

The Impact

This paper examines the impact of equitization on financial and operating performance of state-owned enterprises (SOEs) in Vietnam. Previous related privatization theories have not explained whether there is an improvement in financial and operating performance of equitized SOEs compared to non-equitized SOEs or not. This study proposes to use with-without comparison method through the average treatment effect measuring the impact of equitization on financial and operating performance of SOEs. By using data of 114 SOEs equitized in the period from 2012 to 2014, the author finds that equitized SOEs can not improve profitability, operating efficiency, and output when considering non-equitized SOEs. There is also no evidence for a reduction in the number of employees of equitized SOEs after equitization. These findings are in contrast to previous studies in Vietnam, but there are similarities with the results of studies in China. This is because equitized SOEs in the early post-equitization period in Vietnam are still monitored by the Vietnamese government, as well as the equitized enterprises in the period 2012-2014 are mainly large-scale ones with slow change of operating objectives, monitoring mechanism and weak competitiveness after equitization. However, equitization can help equitized SOEs operate more efficiently than non–equitized SOEs when considering non-listing status or industry group. This research provides implications for the Vietnamese government to encourage non-equitized enterprises to participate in the equitization program actively. The research results also help investors to have appropriate long-term investment strategies in equitized SOEs. This paper also has some limitations for further research.

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Do frequent acquirers outperform in cross-border acquisitions? A study of Indian companies

Review of International Business and Strategy ◽

10.1108/ribs-12-2019-0160 ◽

2020 ◽

Vol 30 (4) ◽

pp. 491-514

Author(s):

Samta Jain ◽

Smita Kashiramka ◽

P.K. Jain

Keyword(s):

Operating Performance ◽

Financial Statements ◽

Acquisition Performance ◽

Content Type ◽

Acquisition Period ◽

Cross Border ◽

Acquiring Firms ◽

The Impact ◽

First Time

Purpose The purpose of this paper is to examine the impact of cross-border acquisitions (CBAs) on the financial and operating performance of acquiring firms from emerging economies in the long-term; the acquiring firms have been segregated into frequent (multiple) and first-time (single) acquirers based on their prior cross-border experience. The intent is to identify if overseas activities bring over and above advantage to multiple acquirers in terms of enhanced financial synergies and reduced costs, motivating them to engage in sequential international transactions. Design/methodology/approach The paper analyses the impact of CBAs announced and completed during 2004–2013 by Indian companies listed on the NIFTY 500 index. The post-acquisition financial and operating performance of Indian cross-border acquirers has been compared with their pre-acquisition performance. The average performance over three-years immediately preceding the acquisition year constitutes the benchmark for the post-acquisition performance. The post-acquisition period includes a year of integration followed by three successive post-integration years. Therefore, in operational terms, the research period extends from 2001–2017. The long-term performance of frequent (multiple) and first-time (single) Indian acquirers has been investigated comprehensively using a set of 16 financial ratios. The performance has been assessed using the secondary data collected from financial statements of acquiring companies; the financial statements and the list of CBAs by Indian companies have been obtained from Thomson Reuter’s EIKON database. Findings The financial and operating performance of frequent as well as first-time acquirers have depicted a similarly deteriorating trend during the post-acquisition period. These findings indicate that the international expansion of Indian companies is not guided by synergy creation potential and may be pushed by the overconfidence or over-optimism and agency conflicts of managers. This, perhaps, indicates that firms are being imprudent in investing free cash flows available with them. Originality/value The study is the first of its kind. No study, to the best of the authors’ knowledge, has analysed the performance of acquiring firms by segregating them into frequent and first-time acquirers using accounting measures of performance. More so, an extensive analysis of the long-term financial and operating performance of acquiring companies is rare to come across in the extant literature.

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The Long-Term Performance Consequences Of Strategic Partnerships In High Tech Industries

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v29i1.7569 ◽

2012 ◽

Vol 29 (1) ◽

pp. 217 ◽

Cited By ~ 2

Author(s):

Carolyn M. Callahan ◽

Rod E. Smith ◽

Angela Wheeler Spencer

Keyword(s):

Global Economy ◽

Operating Performance ◽

Customer Relationships ◽

High Tech ◽

Strategic Partnerships ◽

Product Cycles ◽

Long Term Impact ◽

Term Performance ◽

The Impact

In this paper, we examine how inter-firm partnerships impact long-term operating performance. With a global economy, rapid product cycles, capital constraints and advances in technology, firms seldom possess all the capabilities necessary to maintain and grow market share. Consequently, firms rely on a variety of partnerships. Theory suggests that firms enter such relationships to improve performance through access to new products, new markets, or new capabilities. Yet, relatively little is known about the long-term impact of collaborative arrangements such as alliances and established major customer relationships, although such dual partnership arrangements can have a major impact on the firms performance success. Our empirical results indicate that inter-firm partnerships affect operating performance, but the impact often depends on the industry, the nature of the firm, and the type of partnership.

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The Impact of Stronger Shareholder Control on Bondholders

Journal of Financial and Quantitative Analysis ◽

10.1017/s002210902000040x ◽

2020 ◽

pp. 1-37 ◽

Cited By ~ 1

Author(s):

Sadra Amiri-Moghadam ◽

Siamak Javadi ◽

Mahdi Rastad

Keyword(s):

Credit Ratings ◽

Operating Performance ◽

Credit Default Swap ◽

Direct Benefit ◽

Managerial Entrenchment ◽

Credit Default ◽

The Impact ◽

Swap Spreads ◽

Positive Effect

Abstract We study the impact of stronger shareholder control on bondholders. We find that the passage of shareholder-sponsored governance proposals causes a decline in credit default swap spreads, indicating a net positive effect on bondholders. Evidence suggests that the direct benefit of stronger shareholder control, through the “management disciplining” channel, is larger than the combined adverse effects of directly escalating shareholder-bondholder conflict and indirectly exacerbating exposure to shareholder opportunism. Results are stronger for firms with existing high levels of shareholder-bondholder conflict and for proposals that mitigate managerial entrenchment without exacerbating risk-shifting. Finally, stronger shareholder control improves credit ratings and operating performance in the long-term.

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Suppressed, but Not Forgotten

Swiss Journal of Psychology ◽

10.1024/1421-0185/a000033 ◽

2011 ◽

Vol 70 (1) ◽

pp. 5-11 ◽

Cited By ~ 8

Author(s):

Beat Meier ◽

Anja König ◽

Samuel Parak ◽

Katharina Henke

Keyword(s):

Memory Trace ◽

Thought Suppression ◽

Test Phase ◽

Indirect Test ◽

Final Test ◽

Test Experiment ◽

And Control ◽

Cue Words ◽

The Impact

This study investigates the impact of thought suppression over a 1-week interval. In two experiments with 80 university students each, we used the think/no-think paradigm in which participants initially learn a list of word pairs (cue-target associations). Then they were presented with some of the cue words again and should either respond with the target word or avoid thinking about it. In the final test phase, their memory for the initially learned cue-target pairs was tested. In Experiment 1, type of memory test was manipulated (i.e., direct vs. indirect). In Experiment 2, type of no-think instructions was manipulated (i.e., suppress vs. substitute). Overall, our results showed poorer memory for no-think and control items compared to think items across all experiments and conditions. Critically, however, more no-think than control items were remembered after the 1-week interval in the direct, but not in the indirect test (Experiment 1) and with thought suppression, but not thought substitution instructions (Experiment 2). We suggest that during thought suppression a brief reactivation of the learned association may lead to reconsolidation of the memory trace and hence to better retrieval of suppressed than control items in the long term.

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