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Productivity and Spillover effect of merger and acquisitions in Malaysia

Productivity and Spillover effect of merger and acquisitions in Malaysia Purpose– This paper aims to examine the productivity and spillover effect of Malaysian horizontal merger and acquisition (M&A) activities in the long run. Design/methodology/approach– In terms of analytical tools, economic value added (EVA) and data envelopment analysis (DEA) are used. Findings– The results of this study reveal that M&As in the absence of antitrust laws could be driven by managerial self-interest to create market power instead of realizing synergistic gains. Also, in Malaysia, the non-merging rival firms have significantly higher productivity improvement than the control bidder firms, and therefore, this study has identified the spillover effect as a behavior of M&A reaction. Originality/value– This paper differs from previous studies in that it attempts not only to examine the real long-term gains of horizontal M&A activities in Malaysia but also the spillover effects of M&A activities on similar but non-merging firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Research Review Emerald Publishing

Productivity and Spillover effect of merger and acquisitions in Malaysia

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2040-8269
DOI
10.1108/MRR-07-2013-0178
Publisher site
See Article on Publisher Site

Abstract

Purpose– This paper aims to examine the productivity and spillover effect of Malaysian horizontal merger and acquisition (M&A) activities in the long run. Design/methodology/approach– In terms of analytical tools, economic value added (EVA) and data envelopment analysis (DEA) are used. Findings– The results of this study reveal that M&As in the absence of antitrust laws could be driven by managerial self-interest to create market power instead of realizing synergistic gains. Also, in Malaysia, the non-merging rival firms have significantly higher productivity improvement than the control bidder firms, and therefore, this study has identified the spillover effect as a behavior of M&A reaction. Originality/value– This paper differs from previous studies in that it attempts not only to examine the real long-term gains of horizontal M&A activities in Malaysia but also the spillover effects of M&A activities on similar but non-merging firms.

Journal

Management Research ReviewEmerald Publishing

Published: Mar 16, 2015

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