Influence of State Ownership on M&A Performance

Abstract

While the total amount of mergers and acquisitions (M&As), in terms of both number and value, is at a record high, post-M&A performance has been shown not to be necessarily positive for firms. This paper extends from past research and intends to discover the role that governments play in influencing post-M&A performance-specifically, how state ownership has an effect on post-M&A performance is the primary question intended to be answered. The results are generally supportive to our hypotheses and arguments. By incorporating eras with nationwide government policies in place, we are able to show that post-M&A performance is actually enhanced by state ownership. This finding is further strengthened during institutional change.