The (mis)Measurement of M&A Performance

This paper seeks to provide a different explanation to the claimed inconsistency in M&A performance research findings. While many M&A scholars contend that the problem lies in the variety of M&A performance measures, we believe that the reason for multiple ways to measure performance is that performance, like most organizational constructs, lacks universality. The variety of measures reflects the variety of the scholars’ constructions of performance and of the measurement techniques adopted. The problem is not the variety of measure, but the comparison of different measures as if they were measuring the same feature of the organization. This could be a reason for the claimed inconsistency in M&A research findings. In this article, we therefore aim at answering “How do M&A scholars measure M&A performance”? To achieve this end we conduct a systematic literature review of empirical M&A research to understand how M&A scholars measure the M&A performance construct and how they construct this measure.