College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Document Type

Article

Source Title

International Journal of Innovative Technology and Exploring Engineering

Volume

8

Issue

11 Special issue 2

First Page

417

Last Page

424

Publication Date

9-1-2019

Abstract

Globalization of economic activities created opportunities and threats for companies of different industries to be constantly evolving to compete with local and global competitors. For firms in emerging economies to be ahead of the pack, mergers and acquisitions are the way to go. M&As allow companies to expand faster as it assist them penetrate new markets and cross-sell into different customer bases, improve access to capital, and provide greater advantages over its competitors. With the noticeable relevance of business combination activities, this study aimed to determine whether company demographics strengthens or weakens the relationship between business combination and current ratio. Structural Model Equation (SEM) approach was used to analyze the data derived from 25 publicly listed companies in the Philippines over a 15-year horizon, 2000-2015. Findings suggest that there are direct relationships between business combination and current ratio as well as company demographics and current ratio. Also, the moderation of company demographics was proved to have a significant effect on the existing relationship of the independent and dependent variables. Agency and transaction cost theories supported the given results. © BEIESP.

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Digitial Object Identifier (DOI)

10.35940/ijitee.K1067.09811S219

Disciplines

Accounting

Keywords

Consolidation and merger of corporations; Transaction costs

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