M&A Deals and Corporate Governance Framework: A Study in Indian Telecom Sector

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Author(s): Sohini Ghosh (Birla Institute of Technology, Mesra, Kolkata Campus, Kokata, India)and Sraboni Dutta (Birla Institute of Technology, Mesra, Kolkata Campus, Kolkata, India)
Copyright: 2020
Pages: 12
Source title: Foreign Direct Investments: Concepts, Methodologies, Tools, and Applications
Source Author(s)/Editor(s): Information Resources Management Association (USA)
DOI: 10.4018/978-1-7998-2448-0.ch070

Keywords: Accounting & Finance / Accounting and Finance / Business & Management / Business Science Reference

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Abstract

The escalating importance of mergers and acquisitions (M&A) has coincided with concerns about corporate governance issues. This article investigates how corporate governance mechanisms along with firm-specific control variables impact performance during M&A deals occurring between 2000-2012 in acquiring Indian telecom companies. In this research, firm performance has been measured via accounting based, market based and qualitative performance dimensions, represented by Return on Capital Employed (ROCE), Tobin's Q and Human Capital Return on Investment (HCROI) respectively. Panel data regression techniques was employed for the analysis. The learning from this study reveals that board size and firm size have significant positive relationships with ROCE and HCROI. Chairperson-CEO duality also has positive significant association with ROCE. Shareholding percentage of institutional investors was found to have a significant negative relationship with HCROI. Board independence, firm size and market share significantly affect Tobin's Q.

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M&A Deals and Corporate Governance Framework: A Study in Indian Telecom Sector

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