Merged Research Articles

Does the failure of corporate mergers and acquisitions affect innovation efficiency

This study examines the effects of failed corporate mergers and acquisitions (M&A) on the innovation activities of manufacturing firms. It analyses the mechanism behind this impact by drawing on relevant literature and theories. The analysis is conducted using panel data from 2382 A-share listed manufacturing firms between 2009 and 2022. The findings indicate that following the collapse of corporate mergers and acquisitions (M&A), manufacturing firms have decreased their investment in innovation, resulting in ineffective innovation outcomes and diminished innovation capacities. Furthermore, the research reveals that media attention and ESG performance act as mediators in the relationship between M&A failure and the decline of innovative capability. This paper enhances the study on the efficiency of innovation in manufacturing companies and offers evidence to support the improvement and execution of unsuccessful mergers and acquisitions. Policy makers should prioritize the significance of innovation capability during mergers and acquisitions (M&As) and implement suitable measures to safeguard and enhance innovation capability. Additionally, they should effectively handle media attention and boost environmental, social, and governance (ESG) performance. Implementing this strategy will enhance the efficacy of Mergers and Acquisitions (M&As) and alleviate the adverse effects on organizations' innovative capacities.

Clinical outcomes and profitability following rural hospital mergersand acquisitions.

As US hospital markets become increasingly consolidated, empirical evidence is needed on the clinical and financial impacts of mergers on care provided by rural hospitals. We identified characteristics of rural hospitals that underwent mergers or acquisitions and examined changes in profitability, clinical outcomes, and patient experience at acquired versus non-acquired rural hospitals. We identified 145 rural US hospitals that underwent merger or acquisition between 2009 and 2014 and 906 rural non-acquired control hospitals. For each acquisition year, we used a difference-in-differences design to compare that year's acquired hospitals to a randomly chosen set of non-acquired controls. Adjusted linear regression models were used to assess the relationship between acquisition and changes in profitability, patient experience, and clinical outcomes. Compared to non-acquired hospitals, acquired hospitals were more likely to be for-profit (18.6%vs. 4.6%, p<0.001) and tended to have lower total margins (-1.1%vs. 1.2%; p<0.05) despite higher average clinical volumes. Changes in acquired hospitals' total margins, patient satisfaction, and risk-adjusted 30-day mortality rates were not different than changes among control hospitals. However, acquisition was associated with lower improvement in30-day risk-adjusted readmission rates (-0.58 percentage point [p.p.] difference-in-differences, 95% confidence interval -0.88 to -0.28 p.p., p<0.001). Overall, mergers or acquisitions of rural hospitals were not associated with significant improvements in profitability, clinical outcomes, or patient experience. Policymakers may need to closely monitor rural hospital mergers in order to balance preserving access for rural patients with the consequences of health care consolidation.

Do acquirers care about credit rating consequences? Evidence from credit rating watches

We analyze corporate acquisition announcements and the feedback of credit rating agencies by placing the acquirer’s issuer rating under formal review for a potential change. We show that acquisitions are 42.8% more likely to be withdrawn if the firm’s rating is placed on review for downgrade. Focusing on completed acquisitions, deals associated with reviews for downgrade need approximately 40% more time to be completed, and acquirers are twice as likely to be downgraded in the first year (13.4% versus 25.2%). The stock market considers the probability of an acquirer’s downgrade as deals with increased downgrade risk show lower abnormal announcement returns. We do not find evidence that reviews of rating agencies are anticipated by firms.

The positive impact of corporate mergers on consumer welfare: from the perspective of corporate R and D investment

Enterprise mergers are essential for the development and growth of enterprises, and they are also an important mechanism for the market economy to improve the overall efficiency of the market through the survival of the fittest. Compared to gradually growing a company through internal accumulation, merging with other companies can achieve various goals such as scale expansion, business expansion, and financial optimization faster in a short period. Although business mergers are spontaneous actions of enterprises, the merger of enterprises, especially large enterprises, affects their performance and consumer welfare. To better study the potential impact of corporate mergers, this article combines traditional and modern merger theories to investigate the positive effects of corporate mergers on product prices, corporate innovation, and overall consumer welfare. The impact channels of Chinese-listed company mergers on their R&amp;D expenses are evaluated empirically. Through empirical and theoretical analysis, this article proves that business mergers can improve efficiency, innovation, and consumer benefits by increasing research and development expenditures.

The Impact of Technology and COVID-19 on Mergers and Acquisitions: Implications for Supply Chain Management

This paper explores the issue of MA as it pertains to Supply chain elements such as Enterprise Resource Planning (ERP), the role of technology, and supply chain efficiency. By exploring the issue further, the research seeks to assess the recent trend of increased mergers and acquisitions (MA) and how the activities affect the supply chain management (SCM) role. The results are important in understanding current trends in SCM when it comes to mergers and acquisitions. The discussion covered the role that COVID-19 played in increased trends in MA and technology's role in MA activities and success. The ultimate goal is to understand how technology and COVID-19 impact MA activities and how, in turn, the supply chain management role gets affected.

The Impact of Mergers and Acquisitions on Technological Innovation of Enterprises: Taking Apple as an Example

As market competition becomes increasingly fierce, in order to maintain a leading position in the industry, companies must enhance their core competitiveness to gain priority discourse power in the market. Corporate mergers and acquisitions are the act of acquiring property rights of other legal entities through certain economic means on the basis of equality, voluntariness, and equal compensation. They are a major form of capital operation and management for enterprises. This article aims to study the impact of mergers and acquisitions on technological innovation in enterprises, by analyzing the financial statements of enterprises and exploring the impact of mergers and acquisitions on their main business. Research has found that mergers and acquisitions are a business tool that can effectively enhance a company's technological level without increasing profits, while using less time cost. This provides a reference for enterprises to enhance their market competitiveness, differentiate their products, and adjust their business strategies.

Mergers and Acquisitions in the Digital Age: The Role of Technology in Streamlining Financial Integration

Abstract: This comprehensive article explores the transformative role of technology in streamlining financial integration during mergers and acquisitions (M&amp;A) in the digital age. It examines how advanced technological solutions, including cloud-based Enterprise Resource Planning (ERP) systems, automated reconciliation tools, and artificial intelligence (AI) and machine learning (ML) applications, are revolutionizing traditional M&amp;A processes. The paper delves into the impact of these technologies on consolidating financial data, enabling real-time analysis, reducing manual errors, and providing predictive insights for risk assessment and opportunity identification. It also discusses best practices for successful financial integration, emphasizing the importance of pre-merger due diligence, phased integration approaches, and robust cybersecurity measures. Furthermore, the article investigates emerging trends and future prospects in technology-driven M&amp;A, including the potential of blockchain, advanced analytics, and quantum computing to further enhance integration processes. Drawing on recent research and industry surveys, this study highlights the critical role of technology in realizing M&amp;A potential, improving deal outcomes, and creating strategic value in an increasingly complex business environment. The findings underscore the necessity for organizations to embrace technological advancements to remain competitive in the evolving landscape of corporate mergers and acquisitions.

Long-term tax strategy and corporate acquisition payment structure: An analysis based on the book-tax tradeoff theory

This study examines the relationship between corporate acquirers’ long-term tax strategy (i.e., past behavior) and their subsequent choice of an acquisition payment method (i.e., future behavior) based on a book-tax tradeoff analysis. We find that acquirers with a high (low) level of long-term tax avoidance are more likely to have cash (stock)-financed acquisitions. Political influence attenuates the significance of the above relationship. Among the acquirers who use cash-financed payment method, those who are less tax aggressive tend to include debt to finance their acquisitions, suggesting that debt and non-debt tax shields are substitutes for each other in acquisitions.

Impact of Enterprise Innovation Capability on Mergers and Acquisitions Performance

Corporate mergers and acquisitions are beneficial for enhancing competitiveness, promoting industrial upgrading, and expanding market share. Since the 18th National Congress of the Communist Party of China, the country has attached great importance to innovation and focused on promoting innovation, placing it at the core of strategic deployment. It can be seen that enhancing innovation capability is particularly important for enterprises. Based on this background, analyzing the relationship between corporate innovation capability and merger and acquisition performance has important academic research significance. This article selects the corporate mergers and acquisitions events of listed companies from 2015 to 2019 as the research object, and empirically tests the impact of corporate innovation capability on corporate merger and acquisition performance through regression analysis. The empirical results show that: (1) the innovation capability of enterprises has a positive promoting effect on the performance of corporate mergers and acquisitions; (2) Both manufacturing and non manufacturing enterprises show a significant positive correlation between their innovation capabilities and M&amp;A performance; (3) There is a significant positive correlation between the innovation capability of enterprises that do not involve major asset restructuring and their M&amp;A performance; (4) Geographical regions can affect the relationship between a company's innovation capability and its merger and acquisition performance.

Corporate Mergers from the Perspective of Private International

Economic competition casts its shadow on economic projects, as it pushes most of these projects to move towards economic blocs, and international merger is the legal means through which companies and economic projects can achieve their goals in creating these economic blocs. This merger technique directly affects the merging companies because the companies concerned with it not only lose their economic independence, but also lose their legal entity and thus their legal personality, as they disappear completely and are dissolved in the merging company. Also, the international merger of companies takes place through a contract called the merger contract, and these companies are usually of different nationalities, which raises the problem of searching for the law applicable to the merger contract itself, as it is a contract that includes a foreign element, and what is the legal system to which the international merger of companies is subject.

The Impact of ESG (Environmental, Social, and Governance) Considerations on Corporate Mergers and Acquisitions: Strategies for Value Creation

The integration of Environmental, Social, and Governance (ESG) considerations in corporate mergers and acquisitions (M&amp;A) has gained significant traction as companies recognize the strategic value of sustainability in dealmaking. This paper explores how ESG factors can be incorporated into M&amp;A strategies to drive value creation, meet regulatory requirements, and enhance corporate reputation. Leveraging improved data and tracking methods, the study highlights the increasing importance of ESG in M&amp;A, presenting a comprehensive analysis of environmental, social, and governance factors and their impact on M&amp;A processes. Through case studies and an analytical framework, the research provides insights into the benefits and challenges of ESG integration, offering recommendations for companies aiming to achieve successful and sustainable M&amp;A outcomes.

Excess goodwill and enterprise litigation risk

Corporate mergers and acquisitions (M&A) are now a common strategic choice for enterprises. As such, goodwill, which is a core asset of M&A activities, is pivotal for financial valuation and accounting. However, the phenomenon of ‘excess goodwill’, resulting from overvaluation due to management overconfidence and performance promises, poses significant risks, including potential financial statement distortions and increased litigation. This study investigates the intrinsic link between excess goodwill and corporate litigation risk by utilising theoretical analyses and empirical tests. By analysing data from A-share listed companies in Shanghai and Shenzhen from 2007 to 2022, we employed the regression residual method to measure excess goodwill and determine its impact on litigation risk through mediating factors such as financing constraints, risk-taking and agency costs. The findings indicate that excess goodwill significantly increases litigation risk, with a more pronounced effect on manufacturing firms and those with low internal control quality. This research provides valuable insights into optimising goodwill accounting treatment and enhancing enterprise risk management practices. The study's implications suggest that stricter internal controls and cautious goodwill valuation practices are essential to mitigate risks, ultimately contributing to the stability of the capital market and the protection of investor interests.

The role of corporate agreements in the process of mergers and acquisitions of corporations

The role of corporate agreements in the process of mergers and acquisitions of corporations

Global board reforms and corporate acquisition performance

This paper examines the effect of board reforms on corporate acquisition performance using data from 31 countries. Using a difference-in-differences design, we find that the implementation of board reforms in the acquirer's country significantly increases acquirer returns. The increase is driven by reforms involving board independence, but not reforms involving audit committee independence nor the separation of CEO and board chair roles. Further analysis shows that the uplift in acquisition performance following improvements in board independence is strongest in acquirers with more agency problems. The ‘Board reform strengthening’ effect is concentrated in larger acquirers, with more free cash flows, executing large and public-target deals and operating in countries with ex-ante poor investor protection. The empirical evidence indicates that reforming board independence effectively alleviates agency problems between managers and shareholders and improves corporate acquisition performance.

Industry tournament incentives and acquisition performance

This paper examines the effect of industry tournament incentives on acquisition performance. Using the pay gap between a firm's CEO and the highest-paid CEO in the same industry as the measure of industry tournament incentives, we find that deals led by CEOs with higher industry tournament incentives experience higher abnormal announcement returns. This positive relation between industry tournament incentives and acquisition returns is more pronounced when CEOs have greater mobility and probability of winning the tournament prize. Our findings highlight those tournament incentives induced by the external labor market play important roles in corporate acquisitions.

Legal Issues in the European Unions Anti-Cross Border Subsidy Measures: A Study

This article provides a panoramic overview of the "Foreign Subsidies Regulation" that passed on June 30, 2022 and officially took effect throughout the European Union on July 13, 2023. It conducts a deep analysis of the Foreign Subsidies Regulation through the background analysis and discusses why is the Foreign Subsidies Regulation made. Then the basic provisions of the Foreign Subsidies Regulations are discussed in detail from the aspects of the definition of foreign subsidies, distortive effects, review procedures of foreign subsidies, and implementing agencies. In future, most of the non-EU companies doing business in Europe could be subject to the European Commission's new rules on foreign subsidies. Then this article provides an objective analysis of access for companies investing in Europe. By discussing the possible influence, this article identifies strategies for non-EU countries' companies investing in Europe from four aspects:compliance management, corporate mergers and acquisitions and investment, public procurement and corporate financing. Hope the suggestions in this article can be helpful.

Corporate Mergers and Acquisitions &amp; Goodwill Impairment: A Literature Review

In recent years, the landscape of corporate strategies has witnessed a notable shift, propelled by the burgeoning trend of marketization and bolstered by the supportive framework of China's national economic policies. Listed companies are increasingly leveraging mergers and acquisitions (M&amp;A) and restructuring initiatives to propel the expansion of their business operations and fortify their core competitiveness. However, amid this strategic fervor, the looming risk of substantial goodwill impairment stemming from M&amp;A and restructuring endeavors emerges as a pivotal factor, casting a shadow on market stability. This article delves into an extensive examination by amalgamating existing literature on M&amp;A and goodwill impairment studies. It aims to elucidate the root causes behind M&amp;A goodwill impairment and shed light on the economic repercussions associated with such impairments, drawing insights from M&amp;A and goodwill-related concepts and theories. Building upon the foundation of contemporary academic research, the article conducts a thorough exploration into the intricacies of M&amp;A goodwill impairment, culminating in actionable suggestions pertaining to corporate M&amp;A practices and the imperative prevention of goodwill impairment.

The empire strikes back: the financialization of rental housing – a new frontier of accumulation and precarity

ABSTRACT The financialization of rental housing, driven by post-GFC financial contexts, sees assets concentrated in the hands of corporate landlords aided by technological innovations and state support. Foreclosures and evictions, especially in GFC-affected areas, enable corporate acquisition of property at bargain rates, followed by eviction strategies to increase turnover and rental prices, bypassing regulations. This upward distribution of value is supported by growing labor precarity, intertwined with rising rental prices globally. Labor market precarity, linked to stagnant wages, exacerbates housing precarity, creating new forms of accumulation by dispossession. The hypothesis suggests a convergence in “regulated deregulation,” blending formality and informality through financial processes, digital mechanisms, and public policies. Renting becomes a bridging mechanism, transforming housing into a service, managing time and income generation, with potential scalability through digital mechanisms. This marks a departure from historical constraints, potentially establishing unprecedented connections between informality and finance.

Type Diversity of Institutional Investors and Opportunistic Acquisitions

Institutional investors of different types have been shown to exert differential influences on firm strategic decisions individually. Yet, research has largely overlooked how institutional investors of different types can collectively affect firm decision-making. This study investigates the legal type diversity of institutional ownership (hereafter “investor type diversity”) and its influence on corporate acquisitions. Because institutional investors with different legal types have distinct interests and objectives, investor type diversity can create principal–principal conflicts and prevent institutional investors from undertaking coordinated actions, weakening their collective power and ability to play a governance role. We posit that investor type diversity will be positively associated with CEOs’ opportunistic acquisitions because the dilution of shareholder governance, resulting from investor type diversity, grants CEOs the leeway to champion acquisitions aligned more with their personal gains. We also argue that the positive influence of investor type diversity on opportunistic acquisitions will be stronger when CEOs possess a higher level of general managerial ability. However, acquisitions pursued in the presence of higher investor type diversity will be associated with poorer performance. Findings from a sample of 2,106 U.S. firms lend support to our arguments. This study advances strategy research by highlighting the importance of investor type diversity in shaping shareholder governance effectiveness.

The Impact of Corporate Managers' Overconfidence on Corporate Mergers and Acquisitions: A Case Study of Gree's Acquisition of Zhuhai Yinlong

There is an important research topic in behavioral finance: overconfidence. This paper studies the relationship between overconfidence and Merger and Acquisition decision-making from the perspective of managers' irrationality. This paper adopts the case study method, selects Dong Mingzhu of Gree Electric Appliances, an enterprise manager with a distinctive personality, and takes Gree's merger and acquisition of Zhuhai Yinlong as an example to explore and analyze how overconfidence affects the enterprise's merger and acquisition behavior and to further explore the reasons behind its merger and acquisition results. From the perspective of overestimating the value of M&amp;A targets and adopting aggressive debt financing strategies, this paper analyzes how overconfident managers make irrational decisions in the M&amp;A process. Finally, through the phenomenon that the actual situation of Zhuhai Yinlong did not reach Dong's valuation and the unfair financing scheme in the acquisition plan, it is concluded that the overconfident managers overestimated the value of the M&amp;A target.