Main Article Content
Corporate restructuring is an essential part of the business and commonly occurred in Pakistan through mergers and acquisitions. The main purpose of this research paper is to examine the performance of financial firms (Banks) before and after corporate restructuring through merger and acquisition. The researcher also analyzes the impact of corporate tax as a moderating variable on the performance of financial firms (Banks). The researcher used a fixed-effect model in the panel data set with a sample of 18 sets of banks from the period of 2000 to 2019 (20 years). ROA and ROE use as performance indicators with other explanatory variables i.e. ATD, CR, DR, and EPS. Use dummy variables (1 use for pre and 0 use for post) for the pre and post-analysis of corporate restructuring. The study analyzes the financial firm’s performance before and after corporate restructuring with and without moderating variable (CT). The researcher use Pearson Correlation to check the strength of the associations among variables. The results of this study reveal that the performance of financial firms (Banks) improved after corporate restructuring with and without corporate tax (moderating variable). The study further indicates that the corporate tax (moderating Variable) has a significant and positive affect on the performance of the financial firms (banks). The study of corporate restructuring provides comprehensive analysis which may useful for the strategic manager and investor to take effective decisions in the future.
Aggarwal, P., & Garg, S. (2019). Restructuring through spin-off: impact on shareholder wealth. Managerial Finance. https://doi.org/10.1108/MF-11-2017-0487
Ahmed F., Manwani A. & Ahmed S. (2018). Merger & Acquisition Strategy for Growth, Improved Performance and Survival in the Financial Sector. Journal Perspektif Pembiayaandan Pembangunan Daerah, 2(5), 2338-4603.
Akpan, M. N. U., Aik, N. C., Wanke, P. F., & Chau, W. H. (2018). Exploring the long-term Trade-off between Efficiency and Value Creation in Horizontal M&As: Evidence from Nigeria. African Journal of Economic and Management Studies, 9(2), 130-147. https://doi.org/10.1108/AJEMS-06-2017-0139
Awan & Muhammad (2015). Impact of Mergers and Acquisitions on the Performance of Commercial Banks in Pakistan. Journal of Poverty, Investment and Development, 16, 2422-846X.
Bai, Y. (2018). Three empirical studies on the performance of firms involved in M&A and IPOs. Edinburgh Research Archive (ERA). http://hdl.handle.net/1842/31256
Bananuka, J. & Musimenta, D. (2017). The Impact of Merger and Acquisition on Firm Performance in East Africa. Makerere Business Journal, 13(2), pp 109-127.
Banauaka et al, (2017). The impact of Merger and Acquisition on Firm Performance in East Africa. Makerere Business Journal, Vol. 13, Issue 2 2017.
Bhabra, H. S., & Huang, J. (2013). An empirical investigation of Mergers and Acquisitions by Chinese listed companies, 1997–2007. Journal of Multinational Financial Management, 23(3), 186-207. https://doi.org/10.1016/j.mulfin.2013.03.002
Bogetoft, P., & Wang, D. (2005). Estimating the Potential Gains from Mergers. Journal of Productivity Analysis, 23(2), 145-171. https://doi.org/10.1007/s11123-005-1326-7
Correa, R. (2009). Cross-border Bank Acquisitions: is there a Performance effect? Journal of Financial Services Research, 36(2-3), 169-197. https://doi.org/10.1007/s10693-008-0043-624
Cox, R. A. (2006). Mergers and Acquisitions: A review of the literature. Corporate Ownership & Control, 3(3), 55-59. https://doi.org/10.22495/cocv3i3p13
Gattoufi, S., Amin, G. R., & Emrouznejad, A. (2014). A new inverse DEA method for Merging banks. IMA Journal of Management Mathematics, 25(1), 73-87. https://doi.org/10.1093/imaman/dps027
Hahs-Vaughn, D., & Lomax, R. (2013). An introduction to statistical concepts. Routledge.
Hassan, T., Fakhri, I., Bilel, A., Wassim, T., & Faouzi, H. (2018). Dynamic Effects of Mergers and Acquisitions on the Performance of Commercial European Banks. Journal of the Knowledge Economy, 9(3), 1032-1048. https://doi.org/10.1007/s13132-016-0389-1
Ingow A. U. & Oluoch O. (2020). Effect of Corporate Restructuring on the Financial Performance of SACCOs in Kenya. International Journal of Recent Research in Commerce Economics and Management (IJRRCEM), 7(4) 176-181. www.paperpublications.org
Kajirwa, I. H. & Martin, M. W. (2019). Financial Restructuring and non-Financial Performance of Pan Africa Insurance Holding Company, Kenya. International Journal of Research in Finance and Marketing (IJRFM), 9(4), 2231-5985.
Kishwari, A. & Atta U. (2019). The Role and Impact of Merger & Acquisition of Banking Sector in Pakistan. Financial Markets, Institutions, and Risks, 3(3), 2521-1250.
Kolaric, S., & Schiereck, D. (2014). Performance of Bank Mergers and Acquisitions: A review of the recent empirical evidence. Management Review Quarterly, 64(1), 39-71. https://doi.org/10.1007/s11301-014-0099-3
Kulsum, U., Wiryono, S. K., & Nainggolan, Y. N. (2019). Revisiting conceptual framework of governance & financial factors in reverse merger performance. Risk Governance and Control: Financial Markets & Institutions, 9(2), 57-64. http://doi.org/10.22495/rgcv9i2p5
Kumaraswamy et al, (2019). Impact of corporate Restructuring on Financial Firms Performance of Gulf Cooperation Council Firms. Journal of research gate. 19(2) 262-272. DOI: 10.17512/pjms.2019.19.2.22
Marques-Ibanez, D., & Altunbas, Y. (2004). Mergers and acquisitions and bank performance in Europe: The role of strategic similarities. Available at SSRN 587265.
Miras, I. (2016). Hostile takeover case study: analysis of the ase's takeover of rival spil (Master's thesis, Universitat Politècnica de Catalunya).
Muhammad, H., Waqas, M. & Stefania M. (2019). The impact of M&A on Bank’s Financial Performance: Evidence from an emerging economy. Corporate Ownership & Control, 16(3), 52-63. http://doi.org/10.22495/cocv16i3art5 s
Pazarskis, M., Charalampidou, D., Pantelidis, P., & Paschaloudis, D. (2014). Examining Bank Mergers and Acquisitions in Greece before the outbreak of the sovereign debt crisis. Corporate Ownership and Control Journal, 11(4), 175-183. https://doi.org/10.22495/cocv11i4c1p2
Rashid, A. & Naeem, N. (2016). Effects of Mergers on Corporate Performance. Journal of Borsa Istanbul Review, 17(1) 10-24.
Sahu, S. K. & Agarwal, N. (2017). Inter-firm differences in mergers and acquisitions: a study of the pharmaceutical sector in India. Journal of Economic Studies, 44(5), pp.861-878, https://doi.org/10.1108/JES-12-2015-0239
Schober, P., Mmedstat, Christa B. & Schwarte, L. A. (2018). Correlation coefficients: Appropriate use and interpretation. Wolters Kluwer Health, Inc. DOI: 10.1213/ANE.0000000000002864
Shi, X., Li, Y., Emrouznejad, A., Xie, J., & Liang, L. (2017). Estimation of potential gains from bank mergers: A novel two-stage cost efficiency DEA model. Journal of the Operational Research Society, 68(9), 1045–1055. https://doi.org/10.1057/s41274-016-0106-2
Tsirimpasi E. (2018). Share Wealth Effects of Corporate Sell-offs. International Hellenic University. https://repository.ihu.edu.gr/xmlui/bitstream/handle/11544/29392/e.tsirimpasi_bf_17_4_2019.pdf?sequence=1
Waltermann (2018). Deploying Corporate Spin-offs as a Means to Leverage Innovation. An Exploratory Case Study on Henkel Adhesive Technologies & Afinitica. Journal of Research Gate. https://www.researchgate.net/publication/328747732
Yamane, T. (1973). Statistics: An introductory analysis (6th ed.). New York, USA: Harper & Row.
Zia B. & Khan S. (2016). Determinants of Mergers and Acquisitions in Textile Sector of Pakistan. University of Haripur Journal of Management (UOHJM), 1(1), 2415-5098.