Value creation and appropriation following M&A: A data envelopment analysis

Mergers and acquisitions (M&As) are typically inspired by a desire for revenue growth and/or cost efficiency leading to an improvement in financial performance. Post-merger performance has received considerable research attention from scholars in finance and accounting, but the marketing dimension has remained largely unexplored. This research focuses on marketing efficiency as a measure of post-merger performance, and this is investigated via an empirical study of 20 M&A deals within the US commercial banking industry. Data Envelopment Analysis (DEA) is used to measure efficiency, employing two input and two output variables. The results demonstrate that M&A transactions do have a positive effect on the marketing efficiency of the combined firms, although the effect size is small.