The impact of merger on working capital management efficiency of American production firms

Abstract

The purpose of this study is to examine the impact of merger on the efficiency of working capital management of American production firms. This study applied a co-relational research design. A sample of 497 listed American production firms for a period of 4 years (from 2010-2014) was analyzed. The findings of this study indicate that mergers may contribute to an improvement of the efficiency of working capital management. This is a co-relational study that investigated the association between merger and working capital management efficiency. There is not necessarily a causal relationship between the two, although the paper provides some conjectures to such relationship. The findings of this study may only be generalized to firms similar to those that were included in this research. This study contributes to the literature on the factors that improve the efficiency of working capital management, and in particular on the association between merger and the efficiency of working capital management. The findings may be useful for financial managers, investors, financial management consultants, and other stakeholders.