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Factors affecting the Long-Term Post-Acquisition Performance of BRICS Firms Engaging in Cross-Border Mergers and Acquisitions

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  • Damilola Oyetade

    (University of KwaZulu-Natal)

  • Farai Kwenda

    (University of KwaZulu-Natal)

  • Ralitza Dobreva

    (University of KwaZulu-Natal)

Abstract

The purpose of the paper is to examine factors that affect the long-term performance of listed firms from Brazil, Russia, India, China and South Africa (BRICS) that engage in cross-border mergers and acquisitions. This paper adds to the existing literature on the performance of mergers and acquisitions from emerging economies by examining the performance of mergers and acquisitions activities on acquirers from individual BRICS countries and examining whether intra-BRICS acquisitions are more beneficial than non-BRICS acquisitions. The system generalised method of moments estimation technique was employed in order to control for unobservable heterogeneity and potential endogeneity problems using accounting data and merger deal information collected from the Bloomberg online database for the period January 2000 to December 2012.The results obtained indicate that there is persistence in the profits, suggesting that BRICS acquirers continue to profit as they engage in mergers and acquisitions, and firm size significantly impacts the profits of acquirers.

Suggested Citation

  • Damilola Oyetade & Farai Kwenda & Ralitza Dobreva, 2017. "Factors affecting the Long-Term Post-Acquisition Performance of BRICS Firms Engaging in Cross-Border Mergers and Acquisitions," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(2), pages 220-233, April.
    • Handle: RePEc:dug:actaec:y:2017:i:2:p:220-233
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    Cited by:

    1. Ullah, Nazim & Mat Nor, Fauzias & Abu Seman, Junaidah & Ainna Binti Ramli, Nur & FADLY, AHMED, 2023. "Mergers and Acquisitions in Islamic Banking Sector: An Empirical Analysis on Size Effect, Market Structure, and Operational," MPRA Paper 118681, University Library of Munich, Germany.
    2. Ullah, Nazim & Mat Nor, Fauzias & Abu Seman, Junaidah & fadly, ahmed & ainna, nur, 2023. "Acquirer’s Operational Performance and Stability of Islamic Banks: Mediation Role of Market Structure," MPRA Paper 118683, University Library of Munich, Germany.
    3. Ullah, Nazim, 2022. "The Impact of Mergers and Acquisitions on Operational Performance of Islamic Banking sector," MPRA Paper 118682, University Library of Munich, Germany.
    4. Mohammad Ali Al Hayek, 2018. "The Effect of Acquisition on Income Statement Items in Acquired Company (Subsidiary Company) - Case Study," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(5), pages 173-183, May.

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