The Influence of M&A and Alliance on the Financial Performance: Measuring the Performance of M&A and Alliance from Cost Reduction

Abstract

In this manuscript, the causality of these 3 factors are tested using covariance structure analysis with the angle of cost management, these are activities of cost reduction and R&D by M&A or alliance, evaluation of top management on performances of their M&A or alliance, and numerical changes on financial statements. In this analysis, subjective data of the evaluation added to objective data of financial statements. And same standard compares the effects of both; these are similarity in the introduction of outside management resources. As a result, that causality is measured and the contrast is found, the cost reduction has the tendency of effective by M&A, but R&D is effective by alliance. It is suggested that the difference of M&A and alliance in characteristics and purposes make their different influence on the performances. And this study shows the judgment standard or measurement direction for measuring performances of M&A and alliance.