The Effects of Global Mergers and Acquisitions on Corporations' Profitability: A Longitudinal Econometric Study

The Effects of Global Mergers and Acquisitions on Corporations' Profitability: A Longitudinal Econometric Study

Author: 
Keresa Aaron
Program of study: 
D.B.A.
Abstract: 
The purpose of this quantitative, longitudinal econometric study is to investigate the effects of global mergers and acquisitions on U.S. corporations’ profitability, while controlling other factors such as management decisions, organizational culture, and economic climate, integration of operations, government regulations, debt level, and size. The intention was to observe the trends of 38 U.S. companies publicly traded on the New York Stock Exchange that merged with or acquired a total 51 international companies between 2008 and 2011. Several linear regression models were used to test and observe relationships between profitability ratios and independent variables 3 years before and 3 years after the M&A transactions. Findings suggest that the relative size of the target company to the acquiring company had a significant (p-value < 0.05) positive effect on total return on assets and debt level had a significant negative effect total return on assets for public U.S. companies that engaged in global mergers or acquisitions. In addition, there were no significant effects observed for return on total equity.
Dedication: 
I dedicate my dissertation to my son, Cameron, who inspire me to live my life with excellence. I also dedicate my dissertation to my mother, who has always believed in me and loved me unconditionally.
Acknowledgements: 
I give all glory and honor to God. Through Him all things are possible. I owe my deepest gratitude to my committee members for their willingness to share their wisdom, expertise, and guiding me along my doctoral journey. I would like to thank my dissertation Chair, Dr. Tarique Hossain, for his patience, valuable discussions, and conscientious feedback. I would like to thank Dr. Kass for his encouragement from the beginning of my doctoral journey, timely feedback, and diligent support. I would like to thank Dr. Leo Mallette for his generosity in sharing his knowledge, intuitive feedback, and encouragement. Each of you have made it worth the journey. I would like to give a special thanks to all my instructors at University of Phoenix over the course of my doctoral journey. I have learned from each instructor valuable lessons. I would like to thank my family for their love, encouragement, and patience during my doctoral journey. Thanks for always being my greatest cheerleaders.