Firm Financial Performance Following Mergers

@article{Ramaswamy2003FirmFP,
  title={Firm Financial Performance Following Mergers},
  author={Kadangode P. Ramaswamy and James Waegelein},
  journal={Review of Quantitative Finance and Accounting},
  year={2003},
  volume={20},
  pages={115-126}
}
This study, using a sample of 162 firms and industry-adjusted cash flow returns on market value of assets as performance criteria, examines the financial performance of the combined target and acquiring firms over a 5-year post-merger period in relation to the corresponding pre-merger period. We find that post-merger performance is negatively associated with relative target size and positively associated with long-term incentive compensation plans. Firms that are in dissimilar industries also… CONTINUE READING

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