PL EN


2019 | vol. 24, nr 4 | 45-54
Article title

Is the goodwill recognised in a business combination an indicator of the future profitability of the combined company?

Content
Title variants
PL
Czy wartość firmy ujawniona po połączeniu spółek wskazuje na przyszłą rentowność połączonej jednostki?
Languages of publication
EN PL
Abstracts
EN
The aim of the paper is to determine if there is any link between goodwill recognised in a business combination and the future performance of the combined company. The authors focused on examining the effects that business combinations had on the profitability of selected companies, performing a statistical analysis of their financial results. The study covered 730 Polish companies participating in a merger process (the acquiring company was examined at the time of the merger and 3 years after the merger date). The research included companies disclosing positive goodwill (99 companies) and not disclosing it (631 companies). The research period covered mergers in the years 2007-2012. The profitability analysis for 3 years after the merger covered the period until 2015. The result of the empirical research shows that the companies which recognised goodwill during the merger process were more profitable in the examined period of time. The study contributes to a wide research area focusing on examining the effects of business combinations on the future efficiency of combined companies.
PL
Celem artykuły było określenie, czy istnieje powiązanie pomiędzy wartością firmy ujawnioną w wyniku połączenia spółek i przyszłymi wynikami osiąganymi przez jednostkę połączoną. Autorzy skoncentrowali uwagę na zbadaniu wpływu połączenia spółek na rentowność wybranych spółek i przeprowadzili statyczną analizę wyników finansowych przez nie osiągniętych. Badanie objęło 730 polskich spółek, które uczestniczyły w połączeniu. Jednostki przejmujące były badane w roku, w którym nastąpiło połączenie, oraz trzy lata po dniu połączenia. Wśród badanych spółek znalazły się te, które ujawniły wartość firmy (99 spółek), oraz te, które wartości firmy nie ujawniły (631 spółek). Badanie obejmowało połączenia przeprowadzone w latach 2007-2012. Analiza rentowności za okres trzech lat po połączeniu obejmowała okres do 2015 roku. Wyniki badania empirycznego wskazują, że spółki, które ujwaniły wartość firmy z połączenia, były bardziej rentowne w analizowanym okresie. Artykuł stanowi wkład do badań koncentrujących się na wpływie połączeń spółek na przyłą efektywność działania spółek połączonych.
Year
Pages
45-54
Physical description
References
  • Aggarwal, P., and Garg, S. (2019). Impact of mergers and acquisitions on accounting-based performance of acquiring firms in India. Global Business Review DOI: 10.1177/0972150919852009
  • Arvanitis, S., and Stucki, T. (2015). Do mergers and acquisitions among small and medium-sized enterprises affect the performance of acquiring firms? International Small Business Journal, 33(7), 752-773. DOI: 10.1177/0266242614522280
  • Beverly, C., Sutejo, B. S., and Murhadi, W. R. (2019, March). Company performance before and after a merger (16th International Symposium on Management (INSYMA 2019)). Atlantis Press. DOI: 10.2991/insyma-19.2019.8
  • Bouwman, C. H., Fuller, K., and Nain, A. S. (2007). Market valuation and acquisition quality: Empirical evidence. The Review of Financial Studies, 22(2), 633-679. DOI: 10.1093/rfs/hhm073
  • Bruyland, E., Lasfer, M., De Maeseneire, W., and Song, W. (2019). The performance of acquisitions by high default risk bidders. Journal of Banking & Finance, (101), 37-58. DOI: 10.1016/j.jbankfin.2019.01.019
  • Dickinson, V., Wangerin, D. D., and Wild, J. J. (2016). Accounting rules and post-acquisition profitability in business combinations. Accounting Horizons: December 2016, 30(4), 427-447. DOI: 10.2308/acch-51504
  • Fernández, S., Triguero, Á., and Alfaro-Cortés, E. (2019). M&A effects on innovation and profitability in large European firms. Management Decision, 57(1), 100-114. DOI: 10.1108/MD-08-2017-0730
  • Galavotti, I. (2019). Firm-level recent profitability and acquisition performance: Exploring competing theoretical perspectives. Eurasian Business Review, 9(3), 319-345.
  • Gupta, B., and Banerjee, P. (2017). Impact of merger and acquisitions on financial performance: Evidence from selected companies in India. In Conference Proceedings of IMS Business School Doctoral Colloquium (pp. 14-19).
  • Harrison, J. S., Hitt, M. A., Hoskisson, R. E., and Ireland, R. D. (1991). Synergies and post-acquisition performance: Differences versus similarities in resource allocations. Journal of Management, 17(1), 173-190. DOI: 0.1177/014920639101700111
  • Hitt, M. A., King, D., Krishnan, H., Makri, M., Schijven, M., and Shimizu, K. (2012). Creating value through mergers and acquisitions. In D. Faulkner, S. Teerikangas, & R. J. Joseph (Eds.), The hand-book of mergers and acquisitions (pp. 71-113). Oxford: Oxford University Press. DOI: 10.1093/acprof:oso/9780199601462.001.0001
  • Jakubik, P., and Zafeiris, D. (2016). Impact of mergers and acquisitions on European insurers: Evidence from equity markets (IES Working Paper No. 12).
  • King, D. R., Dalton, D. R., Daily, C. M., and Covin, J. G. (2004). Meta-analyses of post-acquisition performance: Indications of unidentified moderators. Strategic Management Journal, 25(2), 187-200. DOI: 10.1002/smj.371
  • Li, Z., and Sun, H. (2016). The Correlation Analysis of Financial Performance and Goodwill of the Listed Companies. In G. Lee (Ed.), Advances in Education Research (vol. 93, pp. 185-191).
  • Liu, Q., Sono, H., and Zhang, W. (2019). Management quality and acquisition performance: New evidence based on firm profitability. Journal of Corporate Accounting & Finance, 30(3), 44-63. DOI: 10.1002/jcaf.22388
  • Malmendier, U., Moretti, E., and Peters, F. S. (2018). Winning by losing: Evidence on the long-run effects of mergers. The Review of Financial Studies, 31(8), 3212-3264. DOI: 10.1093/rfs/hhy009
  • Osborne, J. W. (2015). Curvilinear Effects in Logistic Regression. Best Practices in Logistic Regression. Thousand Oaks, CA: Sage Publications.
  • Pahuja, A., and Aggarwal, S. (2016). Impact of mergers and acquisitions on financial performance: Evidence from Indian banking industry. International Journal of Applied Finance and Accounting (IJAFA), 1(2), 1-18. Retrieved from https://ssrn.com/abstract=2857554
  • Rutkowski A. (2018). Profitability of Serial Acquirers on the Polish Capital Market. In: K. Jajuga, H. Locarek-Junge, L. Orlowski (Eds.), Contemporary Trends and Challenges in Finance (pp. 211-218). Springer Proceedings in Business and Economics. Cham: Springer. DOI: 10.1007/ 978-3-319-76228-9_20
  • Satt, H., and Chetioui, Y. (2017). Does goodwill improve firm performance? Evidence from the Mena region. Risk Governance & Control: Financial Markets & Institutions, 7(2), 108-115. DOI: 10.22495/rgcv7i2art10
  • Valouch, P., and Nesleha, J. (2018). Impact of Mergers on the Company Performance. European Financial Systems, 788.
  • Xiao, L., and Liu, Y. (2016). The impact of the merger goodwill on the profitability of the enterprise. Journal of Interdisciplinary Mathematics, 19(4), 749-758. DOI: 10.1080/09720502.2016.1179492
Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.desklight-b17aa06b-8da1-4fc5-998a-0e5da6ce2b9f
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.