Do Mergers and Acquisitions Affect the Performance of Acquiring Firms?

Evidence for Swiss Small- and Medium-sized Firms


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Date

2012-10

Publication Type

Working Paper

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yes

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Abstract

This paper investigates the post-merger performance effects of mergers and acquisitions (M&As). Our study is based on a representative sample that includes all Swiss M&As that took place in the period 2006–2008. In contrast to previous studies in this field most of our M&As took place between SMEs. Our data allows us to investigate the impact of M&As not only on different measures of economic performance but also on innovation performance. For the empirical analysis we use a matching framework that accounts for endogenous selection. Based on the sample of all M&As we cannot find statistically significant performance effects of M&As for any of the four performance measures. However, we find some positive and statistically significant performance effects when we examine separately specific sub-samples of M&As, namely (a) the M&As with a relative size (as to sales) of the acquired firm of more than 25% of the acquiring firm and (b) the M&As that took place in 2006, i.e. the M&As with the largest time distance between M&A and performance measurement in our sample.

Publication status

published

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Volume

319

Pages / Article No.

Publisher

KOF Swiss Economic Institute, ETH Zurich

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Subject

Mergers and acquisitions; SMALL AND MEDIUM SIZED ENTERPRISES; SCHWEIZ (MITTELEUROPA). SCHWEIZERISCHE EIDGENOSSENSCHAFT; KLEINE UND MITTLERE UNTERNEHMEN; SWITZERLAND (CENTRAL EUROPE). SWISS CONFEDERATION; Innovation performance; Economic performance; BETRIEBSSFUSIONEN; BUSINESS AMALGAMATIONS

Organisational unit

02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute check_circle

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