This paper analyzes changes in corporate performance before and after mergers, using a database of 1,590 corporate mergers of both listed and unlisted companies which took place between 1994 and 2002. When we measure changes in the performance of companies from immediately before to immediately after mergers after controlling the performance of target companies using the Propensity Score Matching method, we find significant falls in indicators such as the TFP level, ROA and the cash flow ratio in manufacturing industries. On the other hand, when looking at changes in performance over the post-merger period, we find that TFP level, ROA and the cash flow ratio improved both in manufacturing and non-manufacturing industries.
