Improvement In Financial Performance Research Articles

ANALISA RASIO LAPORAN KEUANGAN UNTUK MENILAI KINERJA PERUSAHAAN SEKTOR FARMASI YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2019-2020

This study aims to determine the improvement of financial performance during the pandemic in the pharmaceutical sector listed on the Indonesia Stock Exchange (IDX). The approach method used is a quantitative descriptive approach. The type of data used is secondary data obtained from the Indonesia Stock Exchange, namely the financial statements of the Pharmaceutical Sub-Sector Companies from 2019 to 2020. The ratio analysis used in this study includes analysis of liquidity, solvency, activity and profitability ratios, as well as additional ratios from researchers. The previous ones are growth ratio and valuation ratio. The results of the study show that the liquidity ratio of the financial power of PT Merck Indonesia Tbk for the 2019-2020 period is intended for the current ratio to absorb a share in the size, which is quite helpful in balancing the addition of other pharmaceutical companies. The solvency ratio of PT Kalbe Farma Tbk's financial power for the 2019-2020 period intended that the debt to asset ratio absorb the helping measure, and the debt to equity ratio absorb the helping measure because it has a low excess profit. The profitability ratio of PT Kalbe Farma Tbk's financial power in the era of The 2019-2020 period represents the return on assets (ROA) as part of the supporting measure, and the return on equity (ROE) absorbs the part in the said-help measure, although the start of the 2020 period is likely to undergo a downturn. The ratio of progress to the financial power of PT Indo Farma Tbk in the 2019-2020 period was also followed by PT. Kalbe Farma Tbk designates sales progress through an increase in life, genuine benefit progress through a downturn, and an increase in sales progress through an increasing life, although listed companies have the opportunity to go through a downturn, they can still live a life of good progress.

The relationship of balanced scorecard perspectives and government organization performance measurement

PurposeThis research aimed to analyze the causality between the four perspectives in the balanced scorecard (BSC) performance and to analyze the different performance of the four perspectives for the two group schools studied.Design/methodology/approachQuantitative data were processed using Smart PLS 0.3 and an independent sample t-test. Qualitative data collected using open questionnaires on performance achievement strategies and constraints were analyzed using the Leximancer 4.51.FindingsResults showed that innovation and learning performance influenced financial performance and internal business performance. However, innovation and learning performance did not affect customer satisfaction performance. Internal business performance affected financial performance. However, internal business performance did not influence customer satisfaction performance. Customer satisfaction performance did not influence financial performance. Customer satisfaction performance did not mediate the relationship between innovation and learning performance and financial performance. Internal business performance mediated the relationship between innovation and learning performance and financial performance. The two school groups exhibited differing innovation and learning performance, with no difference for the other three perspectives.Practical implicationsThe implication of the study is the necessity to create synergy between all parties (school and authorities) to optimize school performance. Improvement in financial performance, especially related to transparency and accountability, will help to improve stakeholders' trust in schools. The government can use the BSC to evaluate public school performance to achieve comprehensive assessment results.Originality/valueThe use of the four perspectives in the BSC performance since public schools in Indonesia have never implemented it.

Merger and post-merger integration at Oxford University Hospitals: mixed-methods evaluation and lessons learned

Purpose Hospital mergers are common in the United Kingdom and internationally. However, mergers rarely achieve their intended benefits and are often damaging. This study builds on existing literature by presenting a case study evaluating a merger of two hospitals in Oxford, United Kingdom with three distinct characteristics: merger between two university hospitals, merger between a generalist and specialist hospital and merger between two hospitals of differing size. In doing so, the study draws practical lessons for other healthcare organisations.Design/methodology/approach Mixed-methods single-case evaluation. Qualitative data from 19 individual interviews and three focus groups were analysed thematically, using constant comparison to synthesise and interpret findings. Qualitative data were triangulated with quantitative clinical and financial data. To maximise research value, the study was co-created with practitioners.Findings The merger was a relative success with mixed improvement in clinical performance and strong improvement in financial and organisational performance. The merged organisation received an improved inspection rating, became debt-free and achieved Foundation Trust status. The study draws six lessons relating to the contingencies that can make mergers a success: (1) Develop a strong clinical rationale, (2) Communicate the change strategy widely and early, (3) Increase engagement and collaboration at all levels, (4) Be transparent and realistic about the costs and benefits, (5) Be sensitive to the feelings of the other organisation and (6) Integrate different organizational cultures effectively.Originality/value This case study provides empirical evidence on the outcome of merger in a university hospital setting. Despite the relatively positive outcome, there is no strong evidence that the benefits could not have been achieved without merger. Given that mergers remain prevalent worldwide, the practical lessons might be useful for other healthcare organisations considering merger.

Outreach & Sustainability of Microfinance Institutes (MFIs) in the Midst of the Anglophone Crisis in Cameroon: A Comparative Analysis of MFIs Affiliated to CamCCUL Using DEA and Tobit Censored Model for the Period of 2017 and 2020

Microfinance and its origin are associated with poverty reduction. Despite increased regulation on Microfinance Institutions, challenges in terms of financial sustainability and social responsibility (Outreach) still persist. The main goal of this paper is to assess the effect of Anglophone crisis on the Outreach and Sustainability of Microfinance Institutes in Cameroon. The Data Envelopment Analysis (DEA) method and the Tobit Censored model were used on data of 40 MFIs affiliated to CamCCUL selected from the Northwest and Southwest Regions of Cameroon given that these are the two regions that have been highly affected by the Anglophone crisis for the period of 2017 and 2020. Findings reveal that there is trade-off between Outreach and Sustainability of MFIs. The Anglophone crisis has greatly affected the efficiency of MFIs located in the Northwest and Southwest regions of Cameroon. However, analysis showed that there was a slight improvement in outreach and financial performance of MFIs in 2020 as compared to the year 2017 when the crisis was at its peak. It was also realised that the size of MFI, its location, subsidies and other related factors have a great influence on their efficiency. The paper, therefore, recommends that the Government should highly subsidise MFIs in the Northwest and Southwest Regions to enable them to survive in the midst of the Anglophone Crisis and MFIs should adopt good governance practices in order to be efficient both in terms of Social Performance (Outreach) and Financial Performance (Sustainability) in this midst of this crisis.

Influence of Halal Certification on Innovation and Financial Performance

This research is to empirically examine the influence of halal certification on innovation and financial performance by adopting Resource Based View (RBV) theory. The data used were the financial statements of food and beverage corporates listed at Indonesian Stock Exchange of 2015-2018 period. The analysis method employed was multiple linear regression using SPSS. The results show that halal certification significantly and positively affects financial performance. Similarly, innovation also results in positive and significant effect on financial performance, and halal certification positively and significantly affects innovation and financial performance. A number of implications are catered by this research, such as theoretical contribution toward the existing literature related to food corporations in Indonesia. This is expected to be a reference for the study on halal food corporation in Indonesia, as well as to provide knowledge of the improvement of financial performance and innovation through halal certification for food corporate management. performance and innovation through halal certification for food corporate management.

ОРГАНІЗАЦІЯ УПРАВЛІННЯ ЕКОЛОГІЧНО ОРІЄНТОВАНИМ ВИРОБНИЦТВОМ

The article is devoted to the research of theoretical bases of organization of management of ecologically oriented production. The analysis of the financing of environmental protection measures in Ukraine shows a positive trajectory of expenditures on environmentally oriented activities during 2010–2019: total expenditures increased from UAH 13 to 44 billion, or more than 3.3 times. The structure of expenditures is dominated by own funds of enterprises (79 %), funds of state and local budgets – only 2 %. Global improvement of the environment can be achieved only through comprehensive cooperation between the state and enterprises with the support of society. Nature management can be optimized by creating a more advanced management system and introducing new efficient resource-saving technologies. Ecologically oriented activity ensures the observance by enterprises of socio-economic interests under the condition of rational use of natural resources and minimization of anthropogenic impact on the environment. At the same time, sustainable economic growth and stable improvement of financial and economic performance are achieved. The system of environmental production management must be organically integrated into the long-term strategy of enterprise management. The defining priority of ecological production is the target orientation on integration and harmonization of human relations with the environment. We have defined a set of measures for the effective organization of management of environmentally oriented production of enterprises. Among them are the development of environmental policy, compliance with environmental legislation, organizational structure, analysis of indicators and development of environmental programs, formalization of hazardous processes, staff training, document management, monitoring of deviations in environmental management, data accounting, environmental audit and environmental management. Their comprehensive implementation will allow to organize and ensure effective activities that will achieve the optimal ratio of environmental and economic indicators.

Financial Performance Under the Influence of the Coronavirus Disease 2019: Effects of Strategic Flexibility and Environmental Dynamics in Big Data Capability.

This study draws on the dynamic capabilities view and the firm’s big data capability (BDC) in the new economic environment. It constructs an adjusted intermediary model to study the mechanism of BDC, strategic flexibility, and environmental dynamic affecting financial performance. We find that strategic flexibility plays an intermediary role in the “Converse-U” relationship between BDC and financial performance. Environmental dynamics adjust the relationship between BDC and financial performance positively and smooth the “Converse-U” relationship. The findings suggest building and managing BDC, combining BDC with the management process, and achieving continuous financial performance improvement in a dynamic environment. The paper also puts forward the nonlinear hypothesis, discusses the “Converse-U” relationship between BDC and enterprise financial performance in the Chinese context of digital economy explosion and growth, and considers the intermediary mechanism of strategic flexibility and the regulatory effect of environmental dynamics.

Does emission trading system achieve the win-win of carbon emission reduction and financial performance improvement? —Evidence from Chinese A-share listed firms in industrial sector

The implementation of market-based climate policies represented by the emission trading system (ETS) is an important path for countries to participate in global climate governance and achieve the goals of carbon emission peaking and carbon neutrality. Whether the covered firms can improve financial performance through bearing responsibility for cutting emissions, a “win-win” of environmental and economic achievement, is an important way to evaluate the effectiveness of ETS. Based on the Chinese A-share listed firms in industrial sector during the period of 2010–2017, this paper employs PSM-DID method to investigate the impact of China's pilot ETS on financial performance of the covered firms. The results show that the covered firm's financial performance is improved by the implementation of pilot ETS, which can increase firm's ROA by 0.01 unit. Specifically, the pilot ETS can significantly improve the financial performance of non-state-owned firms, without affecting state-owned firms. Similarly, the financial performance improvement is more significant for firms in non-energy industries. Furthermore, the pilot ETS can motivate the covered firms to gain financial profit through cutting carbon emission as a mediation path, and the mediation effect size of carbon emission intensity is 0.001. Besides, firm's innovation ability weakens this mediation path, and the well-developed institutions in pilot area, proxied by high degree of marketization, only weaken the first part of the path, namely, carbon emission reduction led by ETS.

The impact of strategic cost management on the relationship between supply chain practices, top management support and financial performance improvement

The present study investigated the role of strategic cost management as a moderating variable on the relationship between supply chain practices, top management support, and financial performance improvement. Financial performance improvement was considered as a dependent variable, while supply chain practices, strategic cost management, and top management support were taken as the main independent variables. Besides, the financial structure and the firm size were considered as control variables. The research sample included 165 companies that were selected using random sampling from among companies listed on the Tehran Stock Exchange. The data were collected using the Senior Management Survey (SMS) to measure supply chain practices, top management support, and strategic cost management. The results of the structural equation modeling after discriminant tests showed that strategic cost management had a positive and significant effect on the relationship between different subscales of supply chain practices and different measures of financial performance improvement. The results also showed that the relationship between strategic cost management, senior management support, supply chain activities and improving financial performance is non-linear and so that supply chain integration is more effective at low and medium levels and at higher levels. The above has a lesser or even negative effect.

Does service quality influence operational and financial performance of third party logistics service providers? A mixed multi criteria decision making -text mining-based investigation

Since its inception, the third party logistics (3PL) industry has remained an area of interest for academicians and practitioners. The existing literature mostly focuses on single multi criteria decision making (MCDM) method-based holistic performance evaluations of 3PL service providers, whereas distinct operational and financial performance measurements have not received enough attention. Several real-life examples of organizations, such as Hub Group and DSV, indicate that the reliance on financial performance improvement solely does not ensure better operational performance and integrated performance, and vice versa. Additionally, there is an absence of works that focus on designing an integrated MCDM methodology that applies multiple MCDM methods to increase the robustness of the methodology and consider distinct operational, financial, and integrated performance measurements of the 3PL service providers. Additionally, the application of emerging ratio analysis-based MCDM methods such as multi objective optimization based on ratio analysis (MOORA) and complex proportional assessment (COPRA) for performance evaluation has been ignored. Furthermore, the assessment of the service quality of 3PL service providers through their customers’ feedback and the association of this service quality with the abovementioned performance measures have not received enough attention. This motivates us to design a criteria importance through intercriteria correlation (CRITIC) weighting-based integrated MOORA-COPRA MCDM methodology for the performance evaluation of 3PL service providers. We apply our proposed methodology to evaluate the performance of 21 leading 3PL service providers in North America. Additionally, we incorporate text mining methods such as sentiment analysis and topic modeling to analyze the effect of these service providers’ service quality captured through their customers’ reviews on distinct operational, financial, and integrated performance. The insights obtained from the study indicate that service quality (as captured from the consumer reviews) has a positive association with the operational and financial performance of 3PL service providers.

Editorial

Genetic diversity is required for a population to adapt and thrive as external factors change—whether it be disease, natural disaster, or a boom in predator populations. It turns out that this is not unique to species in the natural world. In 2018 McKinsey and company [1] published an article that showed a correlation between diversity in a company's workforce and the company's overall financial performance. As this paper noted, correlation is not causation. Currently, there is not enough data to say that increasing diversity causes improvements in financial performance. However, they do note that most companies only increase diversity when there is a strong initiative to do so. Although DEIS is not a company with the goal of financial gain, it stands to reason that there are benefits to having a diverse membership. April 2020 PNAS published an article that correlated increased diversity with increased innovation [2]. As a Society dedicated to the advancement of dielectrics and electrical insulation, it would be in our best interest to promote diversity within our membership.

The Effect of Non-Interest Income on the Performance of Selected Deposit Money Banks in Nigeria

This paper investigated the effect of non-interest Income on the performance of 6 selected deposit money banks in Nigeria, between 2015 to 2019. A panel regression model was used to determine the effect of non-interest income of the DMBs’ profitability. The variables used are: fee income, commission income, e-income, and foreign transaction income which also influence the profitability of banks were considered in the model for the study using Tobin-Q as the independent variable. The analyses was done using a panel regression model on the EViews 10+ software. The coefficients reveal that with fee income as a ratio of total non-interest income (F-IN/TINC) has a positive effect on bank financial performance with slope coefficient of 6.0995 and significant at 5% (p=0.000), while that of E-income as a ratio of total non-interest income (E-IN/TINC) has a positive effect on bank financial performance with slope coefficient of 6.6879 with p value of 0.0002). Similarly, foreign transaction income as a ratio of total non-interest income (F-IN/TINC) has a positive effect on bank financial performance with slope coefficient of 6.0995 p-value of 0.000. This implies that increases in Fee based -income, E-based income and foreign transactions-based income will result in an improvement in bank financial performance. However, the operating income as a ratio of total non-interest income (OP-IN/TINC) has a negative effect on bank financial performance with slope coefficient of - 2.6035 with p-value of 0.000 at 5% critical value. The study therefore recommends among others that deposit money banks should be actively involved in customer analysis and market research in order to develop those products and services that will continually satisfy majority of their customers so as to generate high non-interest income from such service.

Unraveling the relationship between high‐performance work systems and firm performance: A mediation analysis

ABSTRACTDrawing upon the resource‐based view and economic cost perspective, we examined the effect of firms' use of high‐performance work systems (HPWS) on two firm performance outcomes—firm financial performance (FFP) and firm innovation and improvement (FII), indirectly through firm capacity for learning and transforming external knowledge and technologies (CLT). Our results confirmed that HPWS positively related to both FFP and FII through firm CLT. HPWS was found to have a linear association with CLT but an inverted U‐shape relationship with FFP. We also revealed a three‐factor structure of firm HPWS: motivation to perform, skills to enhance, and opportunity to engage. The supplementary analysis demonstrated a lack of significant three‐way interaction between these three HPWS factors. Implications and future research directions are discussed.

Influence of VAT Incentives on Financial Performance of Manufacturing Companies in Kenya

The purpose of the study was to determine the influence of VAT incentives on financial performance of manufacturing firms in Kenya. The study focused on all manufacturing companies registered under Kenya Association of Manufacturers. The null hypothesis of the study was that there is no statistically significance association between VAT incentives and financial performance of manufacturing companies in Kenya. Descriptive survey research design was adopted where a sample of 211 respondents was selected from a target population of 447 manufacturing firms using stratified random sampling technique. The study collected data for a period covering 10 years, which was from 2009 to 2018. The targeted respondents were the accountants and officers in senior management. The response rate on the questionnaires issued was 73.5%. Both descriptive and inferential data analysis was carried out. The data failed in the test of normality and so the study applied ordinal regression analysis for the determination of the model. The findings of the study revealed that VAT incentives had statistically significant influence on financial performance of manufacturing companies in Kenya; hence, null hypothesis was rejected at 0.05 level of significance. The study concluded that influence of VAT incentives leads to improvement in financial performance of manufacturing firms in Kenya. Hence, VAT incentives are key to financial performance of manufacturing companies. The study therefore recommended that the management of manufacturing companies should utilize VAT incentives that are offered by the government, and the government should review the VAT policy so as to widen the gap on VAT incentives.

The financial impact of the financial fair play policy on Spanish football

PurposeThis study aims to explore how responsible corporate behaviour, specifically self-imposed financial regulatory control, might subsequently be reflected in the financial performance of companies subject to such regulation.Design/methodology/approachIn this study, the authors aim to explore how financial compliance in the form of the Economic Control Regulation (ECR) has impacted on the financial performance of professional football clubs in Spain. To this purpose, the authors adopted a quasi-experimental before and after study design. This type of design assesses the object of study before and after a specific event in order to determine whether this event has had any effects on the object. In this case, the event was the coming into effect of the ECR in the fiscal year of 2012, and the object hypothetically affected was the clubs’ economic performance.FindingsThe authors can confirm that in general terms and for the whole set of clubs analysed, the ECR has had a strong and positive effect on financial performance.Research limitations/implicationsIn this study, the authors wish to establish a link between the idea of “compliance” and that of “responsible corporate management practice”. It is not just a matter of compliance with the law. The fact of complying with certain laws could, in general terms, or from the point of view of common sense, be qualified as “responsible behaviour”. However, under the contemporary concept of corporate responsibility, compliance with the law is a behaviour that must be taken for granted. Responsibility, therefore, would entail going beyond such expected behaviour to one that exceeds the environment's expectation of the corporate actor.Practical implicationsWhat extent improvements in financial performance have also boosted social performance. Confirming such a positive effect endorses the argument that ethical improvements in corporate culture have a general effect on business sustainability in its different aspects: economic, social, environmental and in governance.Social implicationsThe authors may foresee that the culture of compliance will spread from the finance departments to other management areas. Its connection with ethical business practice is directly linked to the more complex concept of the “citizen company”. There are suggest interesting bases on which professional football clubs might move from a traditional profit-oriented company model towards a more contemporary one oriented towards relationships of integrity with the sport's environment. This study shows that the ECR has been a starting point for the development of Spanish professional football clubs towards this type of “citizen company”.Originality/valueIt was a single-sector study whose principal value lies in the verification of whether responsible economic management (the main consequence of applying the ECR) had any effects on company profits, financial results and other important indicators. In addition to fostering responsibility, this new management model involves a special innovation, as it is based on self-regulation (i.e. on regulations not imposed by national or supranational states), designed and implemented to ensure the sector's viability.

Effect of Internal Control Systems on Financial Performance of Public Universities in Kenya

Most public Universities across the world have reported suboptimal financial performance compared to private universities. The poor financial performance can be attributed to financial management practices. The sound financial management practices require the institutions to have robust internal control systems. However, there are limited empirical research findings regarding the relationship between the internal control systems and financial performance in public universities in Kenya. The general objective of the study was to establish the effect of internal control systems on financial performance of public universities in Kenya. The study specific objective was to investigate the effect of detective controls on the financial performance of public universities in Kenya. The study was anchored on agency theory, stewardship theory, systems theory and attribution theory. The study adopted a causal research design. The target population of respondents were the deputy vice chancellors finance, registrar finance and administration, ICT personnel, finance officers and internal auditors in the 37 public universities in Kenya. The target population was 185 respondents. The study worked with a sample of 34 public universities through stratified random sampling, and the other three were used for pilot testing. Primary data was collected from sample population using semi-structured questionnaires. Secondary data was collected through evaluation of reports, organizational journals, publications and review of information from the organizations website. Quantitative data was analyzed using Statistical Package for Social Sciences (SPSS). All the questionnaires received were referenced and items in the questionnaire coded to facilitate data entry. After data cleaning which entailed checking for errors in entry, descriptive statistics and frequencies were estimated for all the variables and information presented inform of tables, graphs and pie charts. Descriptive statistics and inferential statistics were used because they enabled the researcher to meaningfully describe distribution of scores or measurements using a few indices. Inferential data analysis was done using Pearson Correlation coefficient and regression analysis. Regression analysis was conducted to empirically determine whether detective controls were significant in determining the financial performance of public universities in Kenya. Regression results indicated the goodness of fit for the regression between detective controls and financial performance was strong. From the regression model, detective controls and financial performance to a constant zero, financial performance would be 3.132. It was established that a unit increase in detective controls would cause an improvement in financial performance by a factor of 0.237. This clearly showed that there was a positive relationship between detective controls and financial performance. P-value was less than 0.05, which showed that variables covered in the study on detective controls were statistically significant to influence financial performance. The study concluded that detective controls had a positive and significant influence on the financial performance of public universities in Kenya. Keywords: Internal control Systems, Detective Controls, Financial Performance DOI: 10.7176/RJFA/12-16-09 Publication date: August 31 st 2021

Impact Investing in Disadvantaged Urban Areas

We examine whether impact investing is more effective in fostering business venture success and social impact when directed toward ventures located in vs. outside disadvantaged urban areas (i.e., areas with high crime, unemployment, and poverty). We explore this question in the context of loans made to business ventures located in French “banlieues” vs. “non-banlieues”. We find that loans issued to banlieue ventures, compared to non-banlieue ventures, yield greater improvements in financial performance, as well as greater social impact in terms of the creation of local employment opportunities, quality jobs, and jobs for minorities—all of which contribute to the social inclusion of marginalized communities and the development of sustainable cities.

The Impact of Carbon Disclosure on Financial Performance under Low Carbon Constraints

In the context of low-carbon constrained development, in order to avoid the risk brought by climate change, more and more companies choose to disclose carbon information, respond to the national policy of carbon emission reduction and focus on the sustainable development of enterprises. This paper will investigate the impact of carbon disclosure on financial performance based on the 2011–2018 CDP report, taking the Fortune 500 companies as a sample. The study finds that for carbon-intensive industries, carbon disclosure cannot significantly contribute to the improvement of financial performance in the current period, but for carbon-non-intensive industries, carbon disclosure can significantly contribute to the improvement of financial performance in the current period, and the positive impact of carbon disclosure on financial performance in the current period can be extended to the next period. Finally, based on the findings of the empirical study, this paper puts forward policy recommendations for the construction of China’s carbon disclosure system.

Modern approaches to improve the efficiency of talent management in a company with a complex structure

Subject. The article considers the issue of improving the system of talent management aimed at increasing its efficiency. It presents an overview of works dedicated to the study of the nature of talent in the context of searching effective forms for organisational talent management in a company with a complex structure. Objectives. To describe the methods used to assess the effectiveness of talent management in an organisation with a complex structure, to identify their strengths and weaknesses. Methods. The study used the method of the assessment centre to assess the impact of talent indicators on the final financial results of the organisation, and a balanced method of assessing the effectiveness of talent management. Most organisations with complex structures do not run special programmes aimed at the development of professional competencies of talented employees, which eliminates the possibility of a systematic approach to this task. Another problem is that organisations with complex structures have no system of methods of performance-based talent ranking, which would greatly facilitate the assessment of the talented employees’ performance. A discrepancy between the theory and practice explains the necessity to develop a method to evaluate the performance of talented employees’ and their contribution to the implementation of the strategy aimed at the improvement of financial and economic performance in an organisation with a complex structure. Conclusions. The process of talent management in an organisation with a complex structure will be efficient if an adapted project process method is implemented. The method involves creating individual "performance and effectiveness charts" to evaluate the performance of talented employees, which ultimately will enhance their motivation and improve the financial and economic performance of the organization. This methodology takes into account each completed project, highlighting in the final report both incurred expenses associated with the participation of the talented employee in it and the revenue derived as a result of their work.

An Assessment of Financial Performance and Service Facility Improvement after Merger and Acquisition of Financial Institutions of Nepal

Merger and acquisition are one process to integrate the two or more similar types of institutions into one institution. Basically, more banking sectors are gone in merger and acquisition in Nepal. Nepal Rastra Bank has introduced the Merger by law – 2068 BS with the objective of reducing the number of BFIs, enhancing financial stability and promoting public confidence on the banking sector, which encouraged and compelled the banking sectors to proceed the merger and acquisition process for their long-term sustainability. Considering this status, the study was conducted to identify the impact of merger and acquisition on financial performance and service quality of financial institutions of Nepal. The study was conducted covering the category A and B bank which were established after merger and acquisition process. It was a cross-sectional study conducted among the 385 employees of banking sectors. The result shows that the financial performance and service quality of both types of banks (category A and B) was significantly difference in post-merger situation because the p value of t-test was less than .05 significant level.