This study reviews existing empirical studies on M&A effect on market evaluations and corporate performances. Market evaluation studies focus on short-term effect of M&A and they report the stock of acquiring companies negatively evaluated just after M&A announcement. They do not have consensus of conclusion for long-term effect. Corporate performance studies focus on long-term effect of M&A using the theoretical framework of diversification strategy. The empirical results support that M&A has positive effect on profitability when the business of acquiring companies has similarities to that of acquired companies. But they still fail to answer which kinds of similarities make positive effects for M&A because of the ambiguous definition of business similarity in existing studies. Three paths are required for further studies: (i) use of clear definition of similarity patterns of business segments with business complementarity, (ii) extending RBV framework studies to performance measurement of innovation and profitability, and (iii) empirical examination of the effect of headquarter capabilities on M&A based on dynamic capability theory.