The mediating effect of financial ratios, corporate governance and corporate social responsibility on the relationship of business combination on abnormal returns and on firm value using multi-variate analysis with latent variables

Date of Publication

8-2019

Document Type

Master's Thesis

Degree Name

Master of Science in Accountancy

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Thesis Adviser

Rodiel C. Ferrer

Defense Panel Chair

Jerwin B. Tubay

Defense Panel Member

Joy Lynn R. Legaspi
Moses Manalang

Abstract/Summary

The substantially large number of business combination and the materially huge value invested therein imply that it is becoming large-scale feature of global economies. History proves that while there are business combinations that succeeded, there are those deals that failed, even the biggest merger ever caused by the compounding effects of various factors including fraudulent financial reporting, poor governance and discordant cultures and values. Here from, the paper draws interest about how business combination truly affects resulting firms in terms of their abnormal returns and firm value as mediated by financial ratios, corporate governance and corporate social responsibility. Literature showed diverged results regarding the effects between the variables. Hence, the paper utilized explanatory research design. It applied total enumeration sampling method to include 25 companies after excluding those firms of financial in nature and with incomplete data. The paper utilized these firms’ annual reports for the three years before the year of business combination, the year of business combination and for the three years thereafter. Thus, it employed 175 samples. Moreover, it used PLS-SEM to conduct the study. Novelty, the paper established that the effect of business combination on abnormal returns is fully mediated by activity ratio while the effect of business combination on firm value is not mediated at all.

Abstract Format

html

Language

English

Format

Electronic

Accession Number

CDTG008200

Keywords

Consolidation and merger of corporations; Corporate governance; Social responsibility of business; Ratio analysis

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Embargo Period

2-18-2025

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