How the strategic to achieve corporate sustainable performance?

The role of mergers, acquisitions and ownership integration

  • Kesi Widjajanti Department of Management, Faculty of Economics, University of Semarang, Indonesia
  • Rohmini Indah Lestari Department of Management, Faculty of Economics, University of Semarang, Indonesia
  • Eviatiwi Kusumaningtyas Sugiyanto Department of Management, Faculty of Economics, University of Semarang, Indonesia
DOI: https://doi.org/10.13135/2384-8677/7916

Abstract

Examine the role of Ownership Interaction on the effect of Merger & Acquisition on the company's sustainable performance. In addition, it also investigates the effect of the interaction between Merger & Acquisition and ownership integration on the company's sustainable performance. This study uses a moderated mediation model to explore the role of Merger & Acquisition on the company's sustainable performance mediated by integration ownership. Merger & Acquisition acts as an independent and moderator variable between the effect of ownership integration on the company's sustainable performance. Data was collected from 51 companies in Indonesia that carried out Merger & Acquisition corporate actions for seven years from 2015-2021. We find that the direct effect of Merger & Acquisition on integration ownership is a U-curve. Integration ownership acts as a partial mediator on the relationship between the effect of Merger & Acquisition on the company's sustainable performance. We find evidence that Merger & Acquisition plays a moderate role by amplifying the effect of ownership integration on the company's sustainable performance. This paper contributes to enriching the literature on good corporate governance oversight mechanisms related to management entrenchment. We find that the integration of ownership of a company directly participates in the Merger & Acquisition corporate action relationship which has an impact on the company's sustainable performance. The role of ownership integration on the company's sustainable performance is in line with the concept of agency theory alignment in the specific context of companies in Indonesia. We apply a moderated mediation model because we suspect that there is an interaction between Merger & Acquisition and ownership integration in different pathways from mediator to observable dependent variable.

Keywords: corporate action, corporate sustainable performance, merger & acquisition, ownership

Published
2023-09-20
Issue
No 20 (2023)
Section
Original Papers