Research Methodology
This chapter presents the research methodology followed in the study to assess the impact of mergers and acquisitions on financial performance. It also enumerates the research objectives, hypotheses, sources of primary data (based on questionnaire survey,
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Research Methodology
Abstract This chapter presents the research methodology followed in the study to assess the impact of mergers and acquisitions on financial performance. It also enumerates the research objectives, hypotheses, sources of primary data (based on questionnaire survey, personal interviews, emails and telephonic calls) and secondary data (drawn from Bombay Stock exchange, SEBI, Prowess database Centre for Monitoring Indian Economy, Thomson Security Data Corporation (SDC) Platinum M&A database), data analysis (primarily in terms of abnormal returns, major financial ratios), event study methodology, statistical techniques used in the study and research model. Keywords Event methodology Abnormal return Parametric test Cross-border acquisitions
2.1
Financial performance Financial ratios Nonparametric test Acquisitions Mergers
Introduction
This chapter contains the research objectives and hypotheses to be tested in the study. It explains the detailed research methodology that has been proposed in order to address these research objectives. It presents the data used to test these hypotheses. There are virtually no comprehensive studies that examine the short-term as well as long-term performance of M&A with a focus on corporate governance, management opinion and motives of M&A. Therefore, this study aims to capture the managerial views on motives of M&A; impact of mergers and acquisitions on stock returns as well as financial performance of acquirers with a focus on corporate governance in Indian context. The present research study uses both primary data (representing the managerial views on motives of M&A and corporate governance survey) and secondary data (related to stock market comprising of stock prices data and financial performance). This chapter is organized into six sections. Section 2.2 (divided into Sects. 2.2.1 and 2.2.2) presents research objectives and hypotheses to be tested. Section 2.3 is © Springer Science+Business Media Singapore 2016 N. Rani et al., Mergers and Acquisitions, India Studies in Business and Economics, DOI 10.1007/978-981-10-2203-6_2
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2 Research Methodology
divided into three subsections. Section 2.3.1 provides a brief on the proposed research methodology used to address the objectives of the study. Section 2.3.2 delineates the scope of the study. Section 2.4 describes the event study methodology in detail. The data used, for empirically examining the objectives for the present study, is summarized in Sect. 2.5. An equally important aspect of this research study is sample selection criteria; it is provided in Sect. 2.6. The concluding observations are listed in the last Sect. 2.7.
2.2
Research Objectives and Hypotheses
2.2.1
Research Objectives
The present study has specifically identified the following objectives: Objective 1: To measure the effect of the announcement of mergers and acquisitions on stock returns of acquiring firms by 1:1 Ascertaining the magnitude and the direction of the abnormal returns for entire sample. 1:2 Conducting anal
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