Informatics Publishing Limited

Anjala Kalsie ¹

Affiliations
1 Faculty of Management Studies University of Delhi, Delhi-110007, IN

Abstract

Capital formation is an important determinant of economic growth. While domestic investments add to the capital stock in an economy, FDI plays a complementary role in overall capital formation and in filling the gap between domestic savings and investment. This paper attempts to examine the effect of two modes of FDI - Mergers &Acquisitions (M&As) and Greenfield FDI on GDP of a nation in different categories of countries - Developed Economies, BRICs and the 5 South East Asian (A5) nations. Using the VAR methodology, it was found that the GDP, cross border M&A and Greenfield FDI impact each other to some extent. There is a link between cross border M&A, Greenfield FDI and GDP. The extent varies according to the type of the country.

Keywords

FDI in Mergers & Acquisitions (M&As), Fdi in Greenfield Investment GDP, BRICS, East Asian Economics.

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Anjala Kalsie ¹, Chand Tandon ²

Affiliations
1 Fortune Institute of International Business, IN
2 NDIM, IN

Abstract

There can be no doubt, however, that the risks associated with capital account opening can be potentially severe; nobody denies this. But the challenge is to keep a measure of balance between those risks (which are typically stressed by the domestic producers of financial services) and the corresponding benefits (which affect a less vocal group, the domestic consumers of those services).

This paper focuses on the liberalization of capital account and that of domestic financial sectors. Although it's true that macro economic environment was equally important before going into capital account liberalization the same is not dealt in this paper The paper is divided as follows Section 2 talks about Capital Account Convertibility, Section 3 is about Prudential and Supen'isoiy Concerns, Section 4 deals with the Problems in Financial Sector Reforms and Section 5 finally Conclude.

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Shikha Mittal Shrivastav ¹, Anjala Kalsie ²

Affiliations
1 IILM, Greater Noida, IN
2 University of Delhi, Delhi, IN

Abstract

The paper examines the impact of foreign ownership (foreign promoter, foreign corporate shareholding and foreign institutional investors) on firm performance. The empirical analysis is done on the panel data of 145 non-financial NSE listed companies for a period of five years, i.e., from 2008-2012. Firm performance has been measured using market based measure Tobin’s Q and accounting based measures Return on Assets (ROA) and Return on Equity (ROE). Multiple regression analysis is done using Pooled OLS and Panel Data-Random Effect Model. Foreign ownership is found to have a positive and significant impact on firm performance measures under Pooled OLS model, but the impact is found only positive in Random Effect Regression. The relationship between foreign corporate ownership and firm performance is positive and significant at varying level of significance. Foreign institutional ownership is found to have an ambiguous relationship with different firm performance measures used.

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Anjala Kalsie ¹, Neha Singh ²

Affiliations
1 Associate Professor, Faculty of Management Studies, University of Delhi, Delhi, IN
2 Senior Research Scholar, Faculty of Management Studies, University of Delhi, Delhi, IN

Abstract

The aim of this article is to show the potential realisation of synergistic advantages for Indian firms experiencing M&A, by examining 120 M&A deals which took place between 2005 and 2015. The aim of the present study is to examine: (a) if the target is small relative to acquirer, then synergy gains will also be small, (b) if the mode of payment for the deal is cash, greater synergies are gained, and (c) if the acquisitions take place in related industries more synergies are gained. The paper uses system generalised methods of moments (GMM) estimation method to estimate the relationship. The results demonstrate that the profitability of acquiring entities increases in post-M&A stage, when the deal is settled in cash and mergers take place in related industries. Synergistic advantages of M&A appear to be perceived by enhanced market cap to assets, improvement in financial leverage, and a positive operating cash flow return on asset. The paper examines a comprehensive set of Indian domestic M&A deals. Such extensive study to assess the potential realisation of synergistic advantages for Indian firms experiencing M&A has not been undertaken in the literature so far. The study’s policy ramifications are that regulators should facilitate the creation of an effective market for corporate regulation. The M&A strategy is highly important in the post-liberalisation phase in the corporate restructuring process. M&A creates synergy with the effective utilisation of capital in the long run.

Keywords

Mergers and Acquisitions, Corporate Performance, India, Synergies, System Generalised Methods of Moments

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