Merger Decisions, Accounting Information and Performance Stability Inside and Outside of Economic Crisis Periods: Evidence From Greece

Abstract

This study examines the merger decisions from a sample of Greek listed companies in the economic crisis period and shortly after its end, by employing various quantitative and qualitative variables of mergers that signalize different levels of risk. The results revealed that the performance subsequent of mergers is not significantly different for the merged companies. But in comparison to control sample of companies without mergers for the examined period, the results reveal that merger transactions signalize a more stable profitability and better performance for the companies with mergers. Furthermore, merger events signalize different performance levels during and after the crisis: mergers that took place when there was no economic crisis are far more profitable and lead to better performance from mergers during the period of economic crisis. Last, regarding the industry relatedness of the merged firms, the industry type and the merger combination of merged companies, there is not any impact from them on the post-merger performance in the examined accounting measures. The study proposes for companies that during crisis periods maybe merger be the only way to survive and provide a stable profitability and accounting performance for shareholders.

The Profitability of Legal Mergers in Times of Economic Crisis – A Polish Example

“…These results align with results of other research focusing on the profitability of M&A transactions in times of crisis (e.g. Pazarskis et al, 2022;Pazarskis et al, 2022a). In order to test the second hypothesis, the sign test was used for each group separately.…”

“…Generally, there seemed to be no statistically significant change in the post-merger financial performance of merged companies (Pazarskis et al, 2022a). However, when compared to other companies, the merged companies performed better and their profitably was more stable in comparison (Pazarskis et al, 2022). Additionally, the moment when M&A deals were finalised also affected the post-merger performance.…”

“…Whereas, no research examining the exact subject has been published yet, some evidence could be drawn from earlier research, analysing earlier economic crises (e.g. Pazarskis et al, 2022).…”

Ethical Concerns Associated With Artificial Intelligence in the Accounting Profession: A Curse or a Blessing?

“…Moreover, we must also consider the responsibility we have as accounting professionals when we use the information given to us by our clients, which is increasingly becoming the responsibility of AI (Loureiro et al, 2021). Moreover, the large and changing volume of legislative regulations that accounting professionals are required to follow by completing accountancy courses will soon be taken over by AI (Leitner-Hanetseder et al, 2021;Pazarskis et al, 2022). It is noted that the aspects of liability and the application of various legal provisions play a crucial role in the field of AI applied in the accounting field as well as other fields.…”

“…Taking this into consideration, we note the importance of dealing with the ethical aspects of AI in the accounting field (Pazarskis et al, 2022). Moreover, considering that it is a nascent field for the accounting profession, we were particularly motivated to discuss and analyze the position of accounting professionals regarding the ethical aspects of AI in the accounting field (Leitner-Hanetseder et al, 2021;Pazarskis et al, 2021).…”