Corporate restructuring and financials firms performance: Evidence from Pakistan

Abstract

Corporate restructuring is an essential part of the business and commonly occurred in Pakistan through mergers and acquisitions. The main purpose of this research paper is to examine the performance of financial firms (Banks) before and after corporate restructuring through merger and acquisition. The researcher also analyzes the impact of corporate tax as a moderating variable on the performance of financial firms (Banks). The researcher used a fixed-effect model in the panel data set with a sample of 18 sets of banks from the period of 2000 to 2019 (20 years). ROA and ROE use as performance indicators with other explanatory variables i.e. ATD, CR, DR, and EPS. Use dummy variables (1 use for pre and 0 use for post) for the pre and post-analysis of corporate restructuring. The study analyzes the financial firm’s performance before and after corporate restructuring with and without moderating variable (CT). The researcher use Pearson Correlation to check the strength of the associations among variables. The results of this study reveal that the performance of financial firms (Banks) improved after corporate restructuring with and without corporate tax (moderating variable). The study further indicates that the corporate tax (moderating Variable) has a significant and positive affect on the performance of the financial firms (banks). The study of corporate restructuring provides comprehensive analysis which may useful for the strategic manager and investor to take effective decisions in the future.