Beyond Binary Decisions : Modeling the Frequency of Mergers and Acquisitions in the Indian IT Industry Using Count Data Models
Authors
-
Muhammadriyaj Faniband
Assistant Professor (Corresponding Author), Symbiosis Centre for Corporate Education, Pune, Symbiosis International (Deemed University), Pune - 411 016, Maharashtra
https://orcid.org/0000-0001-6775-3582
-
Seema Singh
Professor and Director, Symbiosis Centre for Corporate Education, Pune, Symbiosis International (Deemed University), Pune - 411 016, Maharashtra
https://orcid.org/0000-0003-0816-909X
DOI:
https://doi.org/10.17010/ijf/2026/v20i1/175222Keywords:
macroeconomic factors, mergers, acquisitions, IT industry, count data, India.JEL Classification Codes : C58, F62, G34
Publication Chronology: Paper Submission Date: August 5, 2025 ; Paper sent back for Revision : December 19, 2025 ; Paper Acceptance Date : December 22, 2025 ; Paper Published Online : January 15, 2026
Abstract
Purpose : This paper investigated the impact of macroeconomic factors, inflation, exchange rate, interest rate, GDP, and economic policy uncertainty (EPU) on mergers and acquisitions (M&A) activity of the Indian IT industry.
Design/Methodology/Approach : This paper used the count data models, Poisson and Negative Binomial models, for a period ranging from 2007 to 2023.
Findings : We found several important findings: First, inflation showed no significant impact at any lag, while exchange rates had a significant and negative effect in the contemporary period and one lag, but lost significance after two lags. Second, GDP had a significant negative impact in both models, strongest at one lag, but lost significance in the Negative Binomial model at two lags. Third, interest rates had no significant effect on M&A for all periods. Fourth, EPU did not significantly affect the contemporary and one-lag periods but revealed a significant negative relationship in the two-lag period in the Poisson model.
Practical Implications : The findings offered valuable implications for policymakers, business leaders, and investors who are involved in or considering M&A activities in this dynamic industry.
Originality/Value : Despite comprehensive research on M&A decision-making, the literature lacked studies applying discrete outcome models like Poisson or Negative Binomial to model M&A activities, particularly in the Indian IT industry. Therefore, this research filled the methodological and contextual gap.
Downloads
Published
How to Cite
Issue
Section
References
1) Agnihotri, A. (2013). Determinants of acquisitions: An Indian perspective. Management Research Review, 36(9), 882–898. https://doi.org/10.1108/MRR-04-2012-0077
2) Ahuja, S., Singh, S., & Yadav, S. S. (2023). Determinants of cross-border acquisition completion: A study of acquisitions by Indian firms. Global Business Review. https://doi.org/10.1177/09721509231199301
3) Bany-Ariffin, A. N., Hisham, M., & McGowan Jr., C. B. (2016). Macroeconomic factors and firm's cross-border merger and acquisitions. Journal of Economics and Finance, 40(2), 277–298. https://doi.org/10.1007/s12197-014-9304-4
4) Beccalli, E., & Frantz, P. (2013). The determinants of mergers and acquisitions in banking. Journal of Financial Services Research, 43(3), 265–291. https://doi.org/10.1007/s10693-012-0138-y
5) Bhasin, N., Soni, A., & Kar, R. N. (2020). Do institutional and macroeconomic factors matter in IT companies M&As? Evidence from India. Business Perspectives and Research, 9(2), 286–305. https://doi.org/10.1177/2278533720964927
6) Bhatia, A., & Kumar, J. (2024). Unraveling the collapse of private sector banks in India: Evidence from the Lakshmi Vilas Bank's financial performance. Indian Journal of Finance, 18(9), 58–72. https://doi.org/10.17010/ijf/2024/v18i9/174461
7) Bhattacharyya, S. S., & Naser, S. (2020). Comparative analysis of mergers and acquisitions in Indian and international pharmaceutical industry with unique case-lets. International Journal of Business and Globalisation, 25(1), 112–136. https://doi.org/10.1504/IJBG.2020.107833
8) Bolt, W., de Haan, L., Hoeberichts, M., van Oordt, M. R., & Swank, J. (2012). Bank profitability during recessions. Journal of Banking and Finance, 36(9), 2552–2564. https://doi.org/10.1016/j.jbankfin.2012.05.011
9) Bonaime, A., Gulen, H., & Ion, M. (2018). Does policy uncertainty affect mergers and acquisitions? Journal of Financial Economics, 129(3), 531–558. https://doi.org/10.1016/j.jfineco.2018.05.007
10) Cameron, A. C., & Trivedi, P. K. (1996). 12 count data models for financial data. Handbook of Statistics, 14, 363–391. https://doi.org/10.1016/S0169-7161(96)14014-1
11) Chahine, S., Dbouk, W., & El-Helaly, M. (2021). M&As and political uncertainty: Evidence from the 2016 US presidential election. Journal of Financial Stability, 54, Article ID 100866. https://doi.org/10.1016/j.jfs.2021.100866
12) Darayseh, M., & Alsharari, N. M. (2023). Determinants of merger and acquisition in the banking sector: An empirical study. Meditari Accountancy Research, 31(4), 1093–1108. https://doi.org/10.1108/MEDAR-09-2021-1449
13) Dartey-Okofo, E., & Ntsalaze, L. (2022). Examining the influence of managerial ownership on M&A transactions by acquirers from the emerging markets. International Journal of Trade and Global Markets, 15(2), 167–185. https://doi.org/10.1504/ijtgm.2022.121456
14) Dua, P., & Nainwal, N. (2024). Does the market reward corporate environmentalism? Evidence from Indian IT firms. Indian Journal of Finance, 18(6), 46–61. https://doi.org/10.17010/ijf/2024/v18i6/173968
15) Erel, I., Liao, R. C., & Weisbach, M. S. (2012). Determinants of cross-border mergers and acquisitions. The Journal of Finance, 67(3), 1045–1082. https://doi.org/10.1111/j.1540-6261.2012.01741.x
16) Eslava, M., Haltiwanger, J., Kugler, A., & Kugler, M. (2004). The effects of structural reforms on productivity and profitability enhancing reallocation: Evidence from Colombia. Journal of Development Economics, 75(2), 333–371. https://doi.org/10.1016/j.jdeveco.2004.06.002
17) Gala, C., & Bhattacharya, M. (2022). Mergers and acquisitions in the Indian context: A valuation perspective for the Indian pharmaceutical industry. Indian Journal of Finance, 16(4), 31–46. https://doi.org/10.17010/ijf/2022/v16i4/169173
18) Georgopoulos, G. J. (2008). Cross-border mergers and acquisitions: Does the exchange rate matter? Some evidence for Canada. Canadian Journal of Economics, 41(2), 450–474. https://doi.org/10.1111/j.1365-2966.2008.00470.x
19) Gupta, S., Singh, G., & Chandel, A. (2024). Firm value and mandatory risk disclosure: An empirical investigation of listed companies under Ind-AS107 in India. Indian Journal of Finance, 18(11), 24–35. https://doi.org/10.17010/ijf/2024/v18i11/174640
20) Gupta, K., Gaur, D., & Bhatia, P. (2023). Estimating intellectual capital and its impact on firms' performance: Use of A-VAIC and M-VAIC models. Indian Journal of Finance, 17(1), 8–26. https://doi.org/10.17010/ijf/2023/v17i1/172600
21) Huang, P., Lu, Y., & Scrimgeour, F. (2024). Environmental determinants of cross-border mergers and acquisitions: Evidence from the global agricultural and food sector. Applied Economics, 56(8), 956–977. https://doi.org/10.1080/00036846.2023.2174934
22) Huhtilainen, M., Saastamoinen, J., & Suhonen, N. (2022). Determinants of mergers and acquisitions among Finnish cooperative and savings banks. Journal of Banking Regulation, 23(3), 339–349. https://doi.org/10.1057/s41261-021-00170-4
23) Ibrahim, Y., & Raji, J. O. (2018). Cross-border merger and acquisition activities in Asia: The role of macroeconomic factors. Studies in Economics and Finance, 35(2), 307–329. https://doi.org/10.1108/SEF-06-2017-0146
24) Jain, D., Maheshwari, G. C., & Singh, A. (2025). Unveiling the drivers of mergers and acquisitions : The mediating role of access to resources. Indian Journal of Finance, 19(5), 37–57. https://doi.org/10.17010/ijf/2025/v19i5/175043
25) Jois, A., & Chakrabarti, S. (2020). Complacency leading to reduced competitive intensity in the Indian information technology services sector resulting in diminished market opportunity. Global Business Review, 25(1), 7–21. https://doi.org/10.1177/0972150920926957
26) Joshi, N. A. (2022). Financial restructuring and its impact on shareholders' wealth in selected companies in India. Indian Journal of Finance, 16(9), 26–41. https://doi.org/10.17010/ijf/2022/v16i9/172158
27) Kambhampati, U. S., & Parikh, A. (2003). Disciplining firms: The impact of trade reforms on profit margins in Indian industry. Applied Economics, 35(4), 461–470. https://doi.org/10.1080/00036840210155177
28) Kapil, S., & Dhingra, K. (2021). Understanding determinants of domestic mergers and acquisitions through literature review. Indian Journal of Finance and Banking, 6(1), 31–57. https://doi.org/10.46281/ijfb.v6i1.1198
29) Kumar, D., Sengupta, K., & Bhattacharya, M. (2023). Macroeconomic influences on M&A deal outcomes: An analysis of domestic and cross-border M&As in developed and emerging economies. Journal of Business Research, 161, Article ID 113831. https://doi.org/10.1016/j.jbusres.2023.113831
30) Kurniawan, L. A., & Wardhani, R. (2022). The effect of transfer pricing and tax haven on cross-border acquisition. International Journal of Trade and Global Markets, 15(1), 3–11. https://doi.org/10.1504/IJTGM.2022.120898
31) Ledwani, S., & Chakraborty, S. (2023). Evaluation of pooled cross-sectional earnings forecasting models: An Indian evidence. Indian Journal of Finance, 17(8), 8–26. https://doi.org/10.17010/ijf/2023/v17i8/173008
32) Lukas, E., Pereira, P. J., & Rodrigues, A. (2023). On the determinants of the dynamic choice between mergers and tender offers. Journal of Corporate Finance, 83, Article ID 102489. https://doi.org/10.1016/j.jcorpfin.2023.102489
33) Maha, L.-G., Aevoae, G.-M., Viorică, E.-D., & Dicu, R.-M. (2023). Determinant factors of M&As in emerging economies: The impact of financial performance in romanian minority acquisitions. Economies, 11(10), 241. https://doi.org/10.3390/economies11100241
34) Mueller, L., & Schiereck, D. (2011). The role of timing at mergers and acquisitions in the banking industry. International Journal of Monetary Economics and Finance, 4(1), 49–76. https://doi.org/10.1504/IJMEF.2011.038268
35) Niu, W. (2025). Economic policy uncertainty and merger activity in China. Asian Economic and Financial Review, 15(1), 160–181. https://doi.org/10.55493/5002.v15i1.5289
36) Panda, M., & Joshipura, M. (2022). Impact of cross-border mergers and acquisitions on short-term gain to shareholders of target firms in India – effect of the mode of payment and industry relatedness. Afro-Asian Journal of Finance and Accounting, 12(5), 648–677. https://doi.org/10.1504/aajfa.2022.126965
37) Poramapojn, P., & Wiboonchutikula, P. (2024). Determinants of goodwill and its impact on post-merger and acquisition performance in Thailand: A firm-level analysis. Asia-Pacific Journal of Accounting & Economics, 31(5), 740–756. https://doi.org/10.1080/16081625.2023.2176328
38) Prakash, S. (2017). The impact of mergers and acquisitions on shareholders' value: An empirical analysis of select Indian companies. Indian Journal of Finance, 11(9), 22–38. https://doi.org/10.17010/ijf/2017/v11i9/118087
39) Prokop, J. (2009). Monopolisation of triopoly - revisited. International Journal of Computational Economics and Econometrics, 1(2), 113–125. https://doi.org/10.1504/IJCEE.2009.029254
40) Sankar, B. P., & Leepsa, N. M. (2021). Determinants of payment method in mergers and acquisitions: A study on Indian companies. Indian Journal of Finance, 15(10), 44–62. https://doi.org/10.17010/ijf/2021/v15i10/166511
41) Santhi, P., Sasirekha, P., & Anija, J. (2024). A causal linkage between corporate sustainability performance and financial performance of select IT & ITeS companies in India. Indian Journal of Finance, 18(2), 43–59. https://doi.org/10.17010/ijf/2024/v18i2/173520
42) Shah, M. D., & Kannadas, S. (2020). Impact of behavioral aspects in mergers and acquisitions: An overview. Finance India, 34(1), 127–140. https://www.financeindia.org/data/2020/FI341/FI-341-Art07.pdf
43) Takeyari, Y. (2024). Indian IT industry and innovation. In R. Shaw, & S. R. Choudhury (eds.), India, Japan and beyond: Human security, environment, development, innovation and resilience (pp. 163–173). Springer. https://doi.org/10.1007/978-981-97-3282-1
44) Tang, R. Y., & Metwalli, A. M. (2013). Mergers and acquisitions in India, Pakistan and Bangladesh. International Journal of Commerce and Management, 23(4), 327–338. https://doi.org/10.1108/IJCoMA-04-2013-0039
45) Tate, G. A., & Yang, L. (2016). The human factor in acquisitions: Cross-industry labor mobility and corporate diversification. SSRN. https://doi.org/10.2139/ssrn.2578636
46) Thomas, A. E., Bhaumik, A., & Aruja, J. M. (2023). The impact of corporate governance practices on firm-level innovations and their market value: Empirical evidence from India. Indian Journal of Finance, 17(11), 26–39. https://doi.org/10.17010/ijf/2023/v17i11/170424
47) Tripathi, A. A. (2018). Factors affecting effective mergers and acquisition: An empirical investigation. Information Technology in Industry, 6(3), 76–81. https://doi.org/10.17762/itii.v6i3.823
48) Uddin, M., & Boateng, A. (2011). Explaining the trends in the UK cross-border mergers & acquisitions: An analysis of macro-economic factors. International Business Review, 20(5), 547–556. https://doi.org/10.1016/j.ibusrev.2010.11.003
49) Verma, R., & Rathore, J. S. (2021). M&AS of Indian commercial banks: A nonparametric approach to efficiency analysis. JIMS8M The Journal of Indian Management & Strategy, 26(2), 12–21. https://doi.org/10.5958/0973-9343.2021.00008.9
50) Wangdi, S., Paul, R., & Roy, D. (2024). Strategic growth via mergers & acquisitions: An empirical study of post-acquisition performance. Indian Journal of Finance, 18(11), 56–70. https://doi.org/10.17010/ijf/2024/v18i11/174642
51) Zhang, C. (2019). The review of factors affecting merger premium. Journal of Service Science and Management, 12(02), 200–213. https://doi.org/10.4236/jssm.2019.122014
52) Zhang, F., Xiao, Q., Law, R., & Lee, S. (2020). Mergers and acquisitions in the hotel industry: A comprehensive review. International Journal of Hospitality Management, 91, Article ID 102418. https://doi.org/10.1016/j.ijhm.2019.102418
53) Zhao, X., Qu, H., & Huang, Y. (2016). The study on key influencing factors of mergers and acquisitions performance based on China state-owned listed enterprises. Grey Systems: Theory and Application, 6(1), 41–50. https://doi.org/10.1108/GS-07-2015-0036
