The Impact of Financial Performance in Mergers and Acquisitions. Evidence from the Republic of Moldova

Abstract

The performance of mergers and acquisitions (M&A) has become a frequent topic of academic debate.This research examines how capital structure, company size, and the level of indebtedness impact the performance of such transactions. The main objective is to determine which factors affect the return on assets in merger performance, focusing on the companies from the Republic of Moldova. Research methodology: The quantitative research involves the systematization and grouping of data from financial statements provided by the National Bureau of Statistics for companies implicated in M&A, as well as multiple linear regression analysis to assess how changes in the Return on Assets (ROA) ratio depend on independent variables. Additionally, RStudio, Jasp, and Excel were used for statistical data processing, and the Web of Science database was used to identify relevant literature. Our findings confirm the research objectives and questions using three multiple linear regression models, which validate the significant positive relationship between ROA and capital structure for the sample of acquirers. At the same time, net profit and gross margin are the factors that determine variation in ROA, as well as the pre-merger year for the sample of the acquirees, through an inverse relationship, validated using robustness tests. UDC: 658.168.5(478); JEL: G34, Q56, M41, M48