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Productivity and Spillover effect of merger and acquisitions in Malaysia

Nai Chiek Aik (Department of Economics, University Tunku Abdul Rahman, Selangor, Malaysia)
M. Kabir Hassan (Department of Economics and Finance, University of New Orleans, New Orleans, Louisiana, USA)
Taufiq Hassan (Department of Accounting and Finance, University Putra Malaysia, Selangor, Malaysia)
Shamsher Mohamed (International Center of Education in Islamic Finance (INCEIF), Kuala Lumpur, Malaysia)

Management Research Review

ISSN: 2040-8269

Article publication date: 16 March 2015

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.

Keywords

Citation

Aik, N.C., Hassan, M.K., Hassan, T. and Mohamed, S. (2015), "Productivity and Spillover effect of merger and acquisitions in Malaysia", Management Research Review, Vol. 38 No. 3, pp. 320-344. https://doi.org/10.1108/MRR-07-2013-0178

Publisher

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Emerald Group Publishing Limited

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