Abstract
Purpose
Adopting network theory, this study explores how efficiency-driven mergers and acquisitions (M&As) affect acquiring firms’ short-term and long-term operational performance and how acquiring firms’ supply network structural attributes moderate the effects of efficiency-driven M&As in both the short and long terms.
Design/methodology/approach
We collect archival data from multiple sources and construct a sample that consists of 1,568 manufacturing firms during 2010–2017. We apply propensity score weighting-enabled fixed effects models to test the proposed hypotheses.
Findings
We find that efficiency-driven M&As lead to decreased operational performance in the short term while having a neutral effect on the firm’s long-term operations. Moreover, both supply network betweenness centrality and structural holes of the acquiring firm help attenuate the short-term negative M&A effect, whereas only betweenness centrality significantly elevates the acquiring firm’s post-M&A operational performance in the long term.
Originality/value
This study provides further evidence to the M&A performance literature by distinguishing the short- and long-term effects of efficiency-driven M&As. More importantly, it advances the understanding of the critical role of supply networks in tackling post-M&A challenges. It enriches the supply network literature by investigating the differential effects of betweenness centrality and structural holes, thereby disclosing the nuances between the bonding and flow functions of supply networks.
Adopting network theory, this study explores how efficiency-driven mergers and acquisitions (M&As) affect acquiring firms’ short-term and long-term operational performance and how acquiring firms’ supply network structural attributes moderate the effects of efficiency-driven M&As in both the short and long terms.
Design/methodology/approach
We collect archival data from multiple sources and construct a sample that consists of 1,568 manufacturing firms during 2010–2017. We apply propensity score weighting-enabled fixed effects models to test the proposed hypotheses.
Findings
We find that efficiency-driven M&As lead to decreased operational performance in the short term while having a neutral effect on the firm’s long-term operations. Moreover, both supply network betweenness centrality and structural holes of the acquiring firm help attenuate the short-term negative M&A effect, whereas only betweenness centrality significantly elevates the acquiring firm’s post-M&A operational performance in the long term.
Originality/value
This study provides further evidence to the M&A performance literature by distinguishing the short- and long-term effects of efficiency-driven M&As. More importantly, it advances the understanding of the critical role of supply networks in tackling post-M&A challenges. It enriches the supply network literature by investigating the differential effects of betweenness centrality and structural holes, thereby disclosing the nuances between the bonding and flow functions of supply networks.
| Original language | English |
|---|---|
| Pages (from-to) | 1838-1860 |
| Number of pages | 23 |
| Journal | International Journal of Operations and Production Management |
| Volume | 45 |
| Issue number | 10 |
| Early online date | 1 Jul 2025 |
| DOIs | |
| Publication status | E-pub ahead of print - 1 Jul 2025 |
Bibliographical note
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