We propose an alternative method for investigating whether firms improve performance through mergers after taking into account the selection bias of merging firms. We simultaneously consider the dynamics of firm performance and the merger decision by employing full information maximum likelihood...

This study examines the effect of mergers and acquisitions (M&A) on productivity. According to the literature, the effect of a merger or acquisition on an acquiring firm's productivity is small. We examine the extent to which self-selection of M&A contributes to the weak M&A effect. Using data...