Explaining M&A performance: a review of empirical research

Purpose – The purpose of this paper is to provide an understanding of different explanations in mergers and acquisitions (M&A) research that deal with M&A performance. After five decades of M&A research, the findings on M&A performance are diverse and sometimes inconsistent with each other. The explanatory variables studied in the empirical works reflect primarily on researchers’ approach, construct, measurement techniques and data availability, leading to inconsistencies among the findings. In order to understand how researchers have measured M&A performance so far, the gaps in existing work and to identify the scope of future work, the authors conduct a systematic review of empirical M&A research on explaining M&A performance. Design/methodology/approach – This research has been carried out as a structured assessment of past literature. The findings from selected research works have been categorized, grouped and summarized to discern a meta‐analytic view of the work carried out to date. Findings – The M&A performance measures are diverse owing to heterogeneous views on what constitutes M&A performance and organization performance. They are categorized under Accounting Measures, Market Measures and Other Measures, including subjective assessments. The explanatory variables found in the studies are extensive and can be categorized under Deal Characteristics, Managerial Effects, Firm Characteristics and Environmental Factors. Originality/value – The paper extracts some key trends in M&A performance studies carried out in empirical works over two decades. The findings help to identify drawbacks and set an agenda for future work.