The Comparison of the Efficiency Factors of Mergers and Acquisitions in Developed and Emerging

The following research concerns the problem of determinants of M&A’s success. Inefficient M&A cause losses and bankruptcy not only for participating firms but also for the whole market. Moreover, knowing merger efficiency factors can help managers in taking appropriate decisions for M&A. This research suggests that M&A determinants differ for emerging and developed markets, that is why it is important to understand these differences and take them into consideration during decision making. In spite of many papers in this field, there is a lack of information on comparison of mergers in developed and emerging markets. The model is the event study analysis comparing developed and emerging economies and defining the differences based on the data set of several countries M&A between 2014 and 2018. These countries are USA, Great Britain and Japan as developed ones and China, India, Taiwan and Russia as emerging ones. These countries have the largest number of deals for last years, that is why their analysis could be helpful for big number of M&A decisions in the nearest future. Most studies explore very narrow datasets, while current research tries to find out regularities for the whole economy without any restrictions. The final sample includes 2767 deals. Market value added is the variable measuring transaction’s efficiency. The results provide the strong evidence that the primary hypothesis was true. There are significant differences between developed and emerging markets regarding mergers’ efficiency factors. Developed economies are dependent only on acquirer’s indicators regarding takeovers’ efficiency. M&A success in emerging countries in a high degree determined by target’s coefficients. This conclusion has not been received before in the literature. Beside that, cross-border mergers tend to be more successful in developed countries. Finally, it has been confirmed that the impact of acquirer’s profit is stronger in emerging countries.