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Influence of Corporate Government on Performance of M&A Deals
SUMMURYThis paper investigates the impact of corporate governance on efficiency of mergers and acquisitions (M&A deals). The study of corporate governance in emerging capital markets is not widely spread. The subject of corporate governance in the context of M&A deals wasn’t investigated in Russia at all; there are no published scientific papers. However, the study of corporate governance in Russia attracts a lot of attention at present. Thus, there is a need to examine the influence of corporate governance on the efficiency of M&A deals for Russian listed companies.In the study the previous papers affecting corporate governance in the context of M&A deals directly or indirectly were analyzed. Different methods of the efficiency of M&A deals were analyzed, as well as various factors of corporate governance.According to the analysis of previous studies the application of the model of investigating of corporate governance in M&A deals was presented and justified – in accordance with the method of accumulated abnormal return (CAR). Moreover, independent variables were introduced - the determinants of corporate governance. To analyze the impact of corporate governance on the effectiveness of M&A transactions 7 hypotheses responsible for the analysis of the determinants of corporate governance were initiated.The study is based on the M&A transactions of Russian listed companies. The sample is represented by 105 listed transactions for the period from 2000 to 2013, except the financial crisis period. The data used for the sample comes from Bloomberg Data Base, as well as from the annual reports of companies.In general, the regression is highly significant at the 1% level. As a result, it was found that a statistically significant 2 out of 6 independent variables of corporate governance. Confirmation received 1 out of 7 hypotheses with statistical significance of the variables at 5% level. Rejected hypotheses are 2 out of 7 at the 1% of significance level. Assumption about the signs at the variables responsible for the hypothesis is confirmed in 4 out of 7 introduced hypotheses. After regression analysis, the following conclusions were found out. An increase in the number of independent board members leads to more effective implementation of M&A transactions. Combining the post of CEO and Chairman of the Board of Directors has a positive effect on the efficiency of M & A transactions. An increase in the board of directors and the presence of a blocking stake of the acquirer has a negative impact on the efficiency of M&A transactions. The older the CEO is, the more efficient the conduction of the M&A transaction. The results showed that the longer the CEO holds his post, the worse the efficiency of M&A transactions.