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1. Introduction
Performance of mergers and acquisitions (M&As) is a topic that has been dealt with extensively in M&A research since the 1960s. While M&A continues to be a favorite growth strategy for the businesses across the world, the academic community is divided on whether M&As provide real benefits to acquiring firms. Several empirical studies completed mostly in the field of finance conclude that M&As do not always create value or assure growth for the acquirer and the failure rate ranges from 44 to 50 percent ([13] Cartwright and Schoenberg, 2006). However, the literature of industrial organizations and strategic management suggest otherwise ([42] Lubatkin, 1983). Some academicians explain such inconsistency by the fact that each M&A is unique and therefore findings are not comparable ([43] Lubatkin, 1987) while others find that M&As do not create value for all the stakeholders ([17] Datta et al. , 1992). Some researchers suggest that there are unidentified variables that would better explain variance in acquisition performance ([35] King et al. , 2004). Some of the recent researches posit that the construct measurement in the empirical studies is not comprehensive for complex phenomena like M&As ([67] Zollo and Meier, 2008).
In order to address the inconsistency and create a better understanding of how researchers used different variables to explain M&A performance so far, we conduct a systematic literature review of empirical M&A research in narrative form. In this paper, we present a review of 48 papers on M&A performance. We find that 46 unique measures were studied for M&A performance in these papers. More importantly, as many as 125 unique variables have been used as explanatory variables or independent variables in these studies. The reason for such varied ways to measure performance is that performance, like many other organizational constructs, lacks universal definition and construct and is contingent upon the questions the researchers intend to answer. With such a large number of multi-disciplinary measures and explanations of M&A performance, comparison leads to inconsistency. Through this review, we elicit the variety of meanings attached to the term "M&A performance" and identify research areas that can help explain M&A performance better.
To begin with, we realize that instead of single universal definition of M&A performance, the multitude of performance measures need appropriate...