Efficiency of Mergers and Acquisitions in the IT industry in Emerging Markets

<p>Under the conditions of globalization and broad development, the mergers and acquisitions turned into a difficult social and economic process infringing on interests of all levels of international economy. The necessary condition for effective management of these deals is to create a system with right criteria and indicators of efficiency providing complexity of representation of its results and possibility of the coordination of managing subjects&rsquo; interests.</p><p>In recent years, we have been able to observe a significant increase in the quantity of mergers and acquisitions in the Information technology. In the present paper, we will analyze the efficiency of these deals by means of financial indicator changes. We will focus on emerging markets, which are characterized by the existence of great M&amp;A deals during the last 5 years. We are going to use Accounting-study methodology (change and intercept models) to estimate the required effect.</p><p>In this paper, we discussed the reasons why it is of higher importance to investigate efficiency of Mergers and Acquisitions in the IT industry in Emerging Markets. We will conduct the empirical study to reveal the relationship between the M&amp;A deals and operation performance of the combined firm. We have considered the four main approaches to the efficiency measure. We also estimate the determinants of the operating performance and their effect on the investigated indicator. We test several hypotheses to understand whether the determinants have a positive or negative influence on the firm&rsquo;s operating profitability. And that paper will be among the first studies of the efficiency of mergers and acquisitions in the IT industry in emerging markets, which establishes the foundation for future investigation &ndash; such as the combination of investigated approaches (for instance, accounting and clinical studies) or the specification of transactions within one country (to learn features of concrete economy).</p><p>The main <strong>aim</strong> of our research is to carry out economic and statistical analysis of M&amp;A efficiency in the information technology sector of economy in emerging markets.</p><p>Accordingly, the <strong>key tasks</strong> of the research are:</p><p>1. Selection and analysis of relevant literature and web resources;</p><p>2. Promotion of studied hypotheses;</p><p>3. Selection of criteria for sample formation;</p><p>4. Data collection of M&amp;A transactions;</p><p>5. Economic and statistical analysis of data;</p><p>6. Creation of the formalized model by a regression method;</p><p>7. Summing up the main findings of research.</p><p>The <strong>subject</strong> of our research paper is the efficiency of M&amp;A and the <strong>object</strong> is the selection of transactions which took place in emerging markets and in the IT sphere.</p><p>As a result of our research we received a significant relationship between operating performance before and after the transaction. Furthermore, the post-operating performance higher than the pre-operating performance. As for the determinant analysis, the significant connections between motive of the transaction, its nature, a payment method, level of financial leverage and the relative size of assets of the target were also revealed.</p>