International Journal of Business and Economics Volume 21, No. 1 June, 2022

Determinants Influencing Acquisition of Target Firms and Their Post-Acquisition Performance in Post-Global Crisis India

Sheeba Kapil

Indian Institute of Foreign Trade, New Delhi, Indian.

Gaurav Barick

Indian Institute of Foreign Trade, New Delhi, Indian.

Abstract

The study investigated the factors forming selection criteria of target firms for mergers & acquisitions deals carried out in the post- 2008 global financial crisis (2009-2015) and the target firms' post-acquisition performance through these factors. The application of Wilcoxon Signed Rank Test, Multinomial Logistic Regression and the Change Model involving the dif-ference in difference (DID) estimators found a significant difference in selection determinants of target firms between domestic and foreign acquirers. Concerning post-acquisition perfor-mance, domestic target firms outperform inbound firms. The global crisis showed no influ-ence on the selection of firms or their post-acquisition performance. Acquirer firms, irrespec-tive of origin, can reflect on the smaller firm size, low liquid cash, and high asset utilisation parameters of potential target firms to increase positive development potential in their post-acquisition performance.

Keywords：Domestic Acquisition, Global Crisis, Inbound Acquisition, Target Firms, Post-Acquisition Performance.

JEL Classifications：G34.

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