3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item Deficient due diligence?(2013-03-18) Patel, Adnan InayatThe effectiveness of traditional due diligence practices and whether they contribute to Merger and Acquisition (M&A) success or failure is an ongoing debate in finance research. This research report contributes to the debate by examining the effectiveness of traditional due diligence using a qualitative research approach. A dataset of traditional due diligence practices was compiled from the literature, which formed the basis for an interview which was conducted with corporate finance practices. The findings indicate that the traditional due diligence process is considered to be an evolving process, where due diligence practices of the last decade are considered to be significantly different from the due diligence required in acquisitions today. Due diligence is also considered to be indispensable, and its scope and importance underestimated. Furthermore, any perceived deficiency in a due diligence is not necessarily in concept, but rather in execution, with excessive focus on the accounting and legal aspects of a M&A, while neglecting the macro-environment, marketing, production, management and information systems. It is also concluded that most stakeholders have understood that failure to carry out proper due diligence could be financially damaging to the parties transacting. In an attempt to determine what due diligence means for the current as well as the future, this study uncovers a critical trend in the forms and manner of flawed due diligence practices and paves the way to a more strategic due diligence, which are useful for practitioners in the present and in the future for M&A success.Item Deregulation and foreign direct investment : lessons for heavily regulated countries.(2012-10-17) Kitunzi, Mutunzi AhmedCountries with high levels of growth-fostering business deregulation for domestic small and medium scale enterprises (SMEs) appear to attract more FDI inflows than countries with low levels of business deregulation. This may be because SMEs in such deregulated countries attract ample cross-border mergers and acquisitions (M&As), which are a major conduit of FDI inflows. This study therefore investigates the relationship between FDI inflow and business deregulation. The study employs a triangulation of quantitative research methodologies and a panel data of 154 countries to analyze the relationship between FDI and deregulation. Results from the study generally show that there are statistically significant and inversely proportional relationships between inbound FDI and the deregulation of: (i) starting a business, (ii) paying taxes, and (iii) export trading, by a country‘s domestic SMEs. The study also documents positive correlations between cross-border M&As and inbound FDI. Thus, countries are likely to attract more FDI inflows, especially through cross-border M&As, as they deregulate the: starting of businesses, payment of taxes and exportation of products for their domestic SMEs. Therefore, on policy front, it is recommended that in order to enhance FDI inflows, countries ought to deregulate these areas of infringement to efficient running of SMEs; this finding provides a complementary and/or substitute policy to the popular outward-looking incentive programs for attracting FDIs.Item Accounting earnings quality and merger & acquisition performance in South Africa(2012-09-21) Govender, AvishkarThis paper examines the relationship between the quality of accountings earnings and long-run performance for South African acquirers in the context of market-to-book value classifications. Glamour acquirers show significant earnings momentum prior to acquisition; however this momentum is not sustainable. In the period after the acquisition glamour acquirers exhibit a decreasing earnings trend and it is found that South African value acquirers outperform value acquirer’s post-acquisition. This paper does not however identify the determinant of this phenomenon as the hypothesis that the pre-acquisition earnings momentum of glamour acquirers is in part bolstered by their aggressive investments is rejected.