Intangible assets and financial performance of agribusiness in developing economies: the mediating role of absorptive capacity in cross-border mergers and acquisitions

Purpose This paper aims to examine the impact of mergers and acquisitions on intangible assets and the financial performance of acquiring firms in developing countries, exploring the mediating role of absorptive capacity in this relationship. It focuses on developing economies that are actively engaged in mergers and acquisitions with emerging economies. Design/methodology/approach The data used in this analysis come from 26 firms that operated in the agricultural sectors of developing economies between 2014 and 2023. This study uses sample t-tests, the Tobit model and data envelopment analysis to examine these impacts. The study contrasts the financial results of businesses before and after mergers and acquisitions with the valuation of intangible assets. Findings The findings revealed that, following a merger or acquisition, intangible assets and financial performance improved. When acquiring companies expand their net worth through acquisitions or mergers, they can reap several other strategic benefits in developing economies. Research limitations/implications The limitations of this study are that the data used in this analysis are drawn from only 26 companies operating in the agricultural sectors of emerging economies between 2014 and 2023. This sample is not large enough to generalize the results to other regions globally. Originality/value This study offers valuable insights for legislators, academics and practitioners. It provides a framework for making informed decisions. This study contributes to the literature by expanding the concept of cross-border mergers and acquisitions in agribusiness industries in developing countries. In other words, this paper also provides an empirical understanding of cross-border mergers and acquisitions in agribusiness industries in developing economies using a specific framework. To the best of our knowledge, this is the first study to introduce absorptive capacity in cross-border mergers and acquisitions as a mediator variable, providing a new perspective on the changes in absorptive capacity before and after different types of mergers and acquisitions.