||Recently, the economic trend changes rapidly. Under this situation, firms in Taiwan participate in M&A in order to gain more profit and become more competitive. However, whether M&A can improve companies’ performances or not is still an uncertain issue. Hence, this study intends to focus on merger companies to analyze the cause and effect.|
1. What are the determinants of merger behavior?
2. How are the performances of enterprise after merger?
This research collects the list of merger companies from 2004 to 2010 derived from the Department of Commerce, Ministry of Economic Affairs and the data of company’s characteristics from 2003 to 2012 derived from Taiwan Economic Journal database. Since merger is not selected by company randomly but are self-selected based on certain criteria, comparing the averages of treatment groups and control groups may result in biased estimates. This study utilize Propensity Score Matching (PSM) method to analysis the post-merger performances of Taiwanese manufacturing industry.
The empirical results show that, the relatively important determinants affecting merger are size and profitability. In addition, considering the profitability and growth, there are better performances of the Return On Assets and the Sales Growth Rate after merger. However, the better performance of a company does not appear immediately but will appear in the next few years gradually.
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