How have Mergers and Acquisitions Affected Financial Performance of Firms in Indian Manufacturing Sector?

  • Pulak MISHRA Indian Institute of Technology Kharagpur
Keywords: Reforms, mergers and acquisitions, financial performance, competition policy, manufacturing sector, India


The paper examines how mergers and acquisitions (M&As) in India after initiation of reforms in 1991 have affected firms’ financial performance. Using panel data and applying the method of difference GMM, it is found that neither market concentration nor M&As affected firms’ financial performance because of the multidirectional structure-conduct-performance relationships. Instead, interindustry differences in performance have been caused by capital intensity, efforts relating to marketing and distribution, and foreign technology. The findings suggest for a relook at the competition policies and laws, international trade, investment and technology development as they influence financial performance through market structure along with firms’ business strategies, efficiency and competitiveness.