Proceedings of the 2019 International Conference on Organizational Innovation (ICOI 2019)

Synergy, Diversification and Firm Performance in Mergers and Acquisitions

Authors
Stanley Septian, Christiana Fara Dharmastuti
Corresponding Author
Christiana Fara Dharmastuti
Available Online October 2019.
DOI
https://doi.org/10.2991/icoi-19.2019.1How to use a DOI?
Keywords
Merger, Acquisition, Synergy, Diversification, Firm Performance
Abstract
Synergy from merger and acquisition (M&A) theoretically increases firm performance. However, diversification leads to coinsurance effect which reduces firm value. This study aims to analyze the relationship between synergy and firm performance measured using return on assets (ROA) and Tobin’s Q, with diversification as moderating variable. Analysis was carried out using data from 33 M&A cases by non-financial firms listed in the Indonesia Stock Exchange, done between 2010 and 2016. Results show that synergy has a positive effect on both ROA and Tobin’s Q. Meanwhile, diversification moderates the impact of synergy towards both ROA and Tobin’s Q, thereby decreasing firm performance.
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This is an open access article distributed under the CC BY-NC license.

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Proceedings
2019 International Conference on Organizational Innovation (ICOI 2019)
Part of series
Advances in Economics, Business and Management Research
Publication Date
October 2019
ISBN
978-94-6252-806-2
ISSN
2352-5428
DOI
https://doi.org/10.2991/icoi-19.2019.1How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Stanley Septian
AU  - Christiana Fara Dharmastuti
PY  - 2019/10
DA  - 2019/10
TI  - Synergy, Diversification and Firm Performance in Mergers and Acquisitions
BT  - 2019 International Conference on Organizational Innovation (ICOI 2019)
PB  - Atlantis Press
SP  - 1
EP  - 5
SN  - 2352-5428
UR  - https://doi.org/10.2991/icoi-19.2019.1
DO  - https://doi.org/10.2991/icoi-19.2019.1
ID  - Septian2019/10
ER  -