Showing papers on "Market capitalization published in 2013"

The Cost of Carbon: Capital Market Effects of the Proposed Emission Trading Scheme (ETS)

Abstract: In March 2008, the Australian Government announced its intention to introduce a national Emissions Trading Scheme (ETS), now expected to start in 2015 This impending development provides an ideal setting to investigate the impact an ETS in Australia will have on the market valuation of Australian Securities Exchange (ASX) firms This is the first empirical study into the pricing effects of the ETS in Australia Primarily, we hypothesize that firm value will be negatively related to a firm's carbon intensity profile That is, there will be a greater impact on firm value for high carbon emitters in the period prior (2007) to the introduction of the ETS, whether for reasons relating to the existence of unbooked liabilities associated with future compliance and/or abatement costs, or for reasons relating to reduced future earnings Using a sample of 58 Australian listed firms (constrained by the current availability of emissions data) which comprise larger, more profitable and less risky listed Australian firms, we first undertake an event study focusing on five distinct information events argued to impact the probability of the proposed ETS being enacted Here, we find direct evidence that the capital market is indeed pricing the proposed ETS Second, using a modified version of the Ohlson (1995) valuation model, we undertake a valuation analysis designed not only to complement the event study results, but more importantly to provide insights into the capital market's assessment of the magnitude of the economic impact of the proposed ETS as reflected in market capitalization Here, our results show that the market assesses the most carbon intensive sample firms a market value decrement relative to other sample firms of between 7% and 10% of market capitalization Further, based on the carbon emission profile of the sample firms we imply a ‘future carbon permit price’ of between AUD$17 per tonne and AUD$26 per tonne of carbon dioxide emitted This study is more precise than industry reports, which set a carbon price of between AUD$15 to AUD$74 per tonne

Financial intermediation and economic growth

Abstract: The paper evaluates the relationship between financial intermediation and the economic growth in the developing economic systems. First, using dataset from 28 countries,between 2001 and 2010 we define a financial intermediation indicator applying EFA method. We use several dimensions of the financial intermediation: Domestic credit provided by banking sector (% of GDP); Domestic credit to private sector (% of GDP); Broad money (% of GDP); Market capitalization of listed companies (% of GDP). As a preliminary step, using Spearman rank-order co-variance analysis we test the correlation between variables and the result confirms in general a high correlation degree between the indicators. Secondly, we compare this financial intermediation indicator with some dimension of economic growth using three different methods, OLS (Ordinary Less Square), GLM (Generalized Linear Model) and QR (Quantile Regression), in order to check the robustness of the model. The result suggests that the financial intermediation as part of financial development is positively associated with economic growth.

Emerging Equity Markets in a Globalizing World

Abstract: Given the dramatic globalization over the past twenty years, does it make sense to segregate global equities into “developed” and “emerging” market buckets? We argue that the answer is still yes. While correlations between developed and emerging markets have increased, the process of integration of these markets into world markets is incomplete. To some degree, this accounts for the disparity between emerging equity market capitalization in investable world equity market benchmarks versus emerging market economies in the world economy. Currently, emerging markets account for more than 30% of world GDP. However, they only account for 12.6% of world equity capitalization. Interestingly, this incomplete integration along with the relatively small equity market capitalization creates potentially attractive investment opportunities. Our research has important policy implications for institutional fund management.

Bond Markets in Africa

Abstract: African bond markets have been steadily growing in recent years, but nonetheless remain undeveloped. African countries would benefit from greater access to financing and deeper financial markets. This paper compiles a unique set of data on corporate bond markets in Africa. It then applies an econometric model to analyze the key determinants of African government securities market and corporate bond market capitalization. Government securities market capitalization is directly related to better institutions and interest rate volatility, and inversely related to the fiscal balance, higher interest rate spreads, exchange rate volatility, and current and capital account openness. Corporate bond market capitalization is directly linked to economic size, the level of development of the economy and financial markets, better institutions, and interest rate volatility, and inversely related to higher interest rate spreads and current account openness. Policy implications follow.

State-of-the-Art in Stock Prediction Techniques

Abstract: Stock markets are affected by many uncertainties and interrelated economic and political factors at both local and global levels. The key to successful stock market forecasting is achieving best results with minimum required input data. To determine the set of relevant factors for making accurate predictions is a complicated task and so regular stock market analysis is very essential. More specifically, the stock market’s movements are analyzed and predicted in order to retrieve knowledge that could guide investors on when to buy and sell. It will also help the investor to make money through his investment in the stock market. This paper surveys large number of resources from research papers, web-sources, company reports and other available sources.

Foundations of Factor Investing

Abstract: Factor investing is based on the existence of factors that have earned a premium over long periods, reflect exposure to systematic risk, and are grounded in the academic literature. Early financial theory established that for stocks, exposure to the market was a significant driver of returns (e.g., the CAPM). Later, researchers like Barr Rosenberg, Eugene Fama and Kenneth French extended the CAPM to include certain systematic factors that also were important in explaining returns. Tilts towards these factors such as Value, Low Size, and Momentum historically produced excess long-term returns and there were strong theoretical foundations behind these factors. Until now, passive investing has focused on capturing market beta through market capitalization weighted indexes. The only way institutional investors could get access to factors was through active management. Indexation is opening a new way for factor investing today by allowing investors to access factors through passive vehicles that replicate factor indexes. MSCI Factor Indexes provide access to six solidly grounded factors — Value, Low Size, Low Volatility, High Yield, Quality and Momentum. These indexes have historically earned excess returns over market capitalization weighted indexes and experienced higher Sharpe Ratios. This paper is the first in a three-paper series focusing on factor investing.

Active Share and Mutual Fund Performance

Abstract: I sort domestic all-equity mutual funds into different categories of active management using Active Share and tracking error I find that over my sample period until the end of 2009, the most active stock pickers have outperformed their benchmark indices even after fees and transaction costs In contrast, closet indexers or funds focusing on factor bets have lost to their benchmarks after fees The same long-term performance patterns held up over the 2008-2009 financial crisis, and they also hold within market cap styles Closet indexing increases in volatile and bear markets and has become more popular after 2007 Cross-sectional dispersion in stock returns positively predicts average benchmark-adjusted performance by stock pickers

Structure and causality relations in a global network of financial companies

Abstract: This work uses the stocks of the 197 largest companies in the world, in terms of market capitalization, in the financial area in the study of causal relationships between them using Transfer Entropy, which is calculated using the stocks of those companies and their counterparts lagged by one day. With this, we can assess which companies influence others according to sub-areas of the financial sector, which are banks, diversified financial services, savings and loans, insurance, private equity funds, real estate investment companies, and real estate trust funds. We also analyzed the causality relations between those stocks and the network formed by them based on this measure, verifying that they cluster mainly according to countries of origin, and then by industry and sub-industry. Then we collected data on the stocks of companies in the financial sector of some countries that are suffering the most with the current credit crisis: Greece, Cyprus, Ireland, Spain, Portugal, and Italy, and assess, also using transfer entropy, which companies from the largest 197 are most affected by the stocks of these countries in crisis. The intention is to map a network of influences that may be used in the study of possible contagions originating in those countries in financial crisis.

The Impact of Stock Market Performance upon Economic Growth

Abstract: The main purpose of this study was to explore the causal link between stock market performance and economic growth in terms of a simple theoretical and empirical literature framework. Researchers hold diverse opinions regarding the importance of stock markets playing a significant role in economic growth processes by performing the following functions: improving liquidity, aggregating and mobilising capital, observing managers and exerting corporate control, providing risk-pooling and sharing services including investment levels. The growing theoretical literature argues that stock markets are crucially linked to economic growth. The findings suggest a positive relationship between efficient stock markets and economic growth, both in short run and long run and there is evidence of an indirect transmission mechanism through the effect of stock market development on investment. They are seen as providing a service that boosts economic growth. The results are consistent with the theoretical and empirical predictions. Keywords: Stock Market Performance; Economic Growth; Developed and Developing Countries JEL Classifications: F43; G0; G10; G15; R11

Stock Market and Economic Growth in Ghana, Kenya and Nigeria

Abstract: In the paper, we examine the causal relationship and the direction of causality between stock market development and economic growth in Ghana, Kenya and Nigeria. In examining the causal relationship and the direction of causality, we used the Granger Causality test procedure as developed in Granger. The study regressed five indicators of stock market namely stock market capitalization (MC), stock turnover ratio (STO), stock traded value (TVL), number of listed securities (LS), and stock market index (MI) against the real gross domestic product (GDP) which is used as a proxy for economic growth. Using the 1989 – 2009 data sets, the empirical findings of the study show that there is no causal relationship between stock market development and economic growth in Ghana and Nigeria, but revealed a bidirectional causal relationship between stock market development and economic growth in Kenya. When MC was used as a proxy for stock market development, MC and LS were found to Granger cause economic growth. Bidirectional causality was found between STO and GDP. TVL was found to have a strong negative effect on GDP. Based on the results of the study, we recommend that policy makers and regulatory bodies should formulate and implement policies that will attract investors and avail the real sector of the economy the much needed fund for production and encourage listing of companies that contribute largely to GDP in the nation stock exchange.

Do Analysts Follow Managers that Switch Companies? An Analysis of Relations in the Capital Markets

Abstract: We examine the importance of professional relationships developed between analysts and managers by investigating analyst coverage decisions in the context of CEO and CFO moves between publicly listed firms. We find that top executive moves from an origin firm to a destination firm trigger analysts following the origin firm to initiate coverage of the destination firm in 10% of our sample, which is significantly higher than in a matched sample. Analyst-manager “co-migration” is significantly stronger when both firms are within the same industry. Analysts who move with managers to the destination firm exhibit more intense and accurate coverage of the origin firm than they do in other firms and compared to other analysts covering the origin firm. The advantage no longer holds after the executive’s departure, and most of the analysts’ advantage does not carry over to the destination firm. However, the analysts do increase the overall market capitalization of firms in their coverage portfolio. Our results hold after Regulation Fair Disclosure, suggesting that these relationships are not based on selective disclosure. Overall, the evidence shows both the importance and limitations of professional relations in capital markets.

The Development of Stock Markets: In Search of a Theory

Abstract: This paper aims to provide a framework for the main determinants of stock market development. Assessing stock market development requires not only an understanding of its main determinants but also a clear definition of what “stock market development” means and how progress towards it can be measured. This paper reconsiders the concept of stock market development and suggests five dimensions for assessing it. In addition, it proposes four sets of factors that shape or determine stock market development: supply factors, demand factors, institutional factors and economic policies. While both supply factors and demand factors serve as “building blocks” of the stock market, institutional factors and economic policies serve as “supporting blocks. The paper concludes by emphasizing three principles. First, stock market development is a difficult, complex, multi-faceted, and long-term process. Second, stock market development is only part of the overall development of a country’s financial system. Third, stock market development is mainly a private sector activity. Keywords : Stock Markets Development; Measurement of Stock Market Development; Demand for Stocks; Supply of Stocks; Institutional Factors JEL Classifications : G1; G15; G18; G19

Apple's Changing Business Model: What Should the World's Richest Company Do with All Those Profits?

Abstract: Apple Inc. stands out as the world’s most famous, and currently richest, company. To the general public, Apple is known for three things: its intriguing CEO Steve Jobs, who has achieved iconic status in death as in life; its amazing iOS products, especially the iPhone and the iPad, and their predecessor the iPod, which have literally placed sophisticated technology in the hands of the masses; and its stratospheric stock price, which even when in March 2013 it had dropped to 63 percent of its September 2012 peak, gave Apple the highest market capitalization of any company in the world. As a result of its phenomenal success, at the end of fiscal 2012 Apple had $121 billion in liquid assets. In April 2013 the company committed to distributing as much as $100 billion to shareholders in stock buybacks and cash dividends by the end of fiscal 2015. By employing the theory of innovative enterprise to analyze how over the course of its 37-year history Apple became so profitable, we argue that there is no economic justification from a risk-reward perspective for this distribution to Apple’s shareholders. Taxpayers and workers have superior claims on these profits. In analyzing by whom value is created as a basis for considering for whom value should be extracted, we raise the implications of Apple’s changing business model for the future of innovation at this heretofore exceptional American company and even in the U.S. economy as a whole.

Market capitalization and Value-at-Risk

Abstract: The potential of economic variables for financial risk measurement is an open field for research. This article studies the role of market capitalization in the estimation of Value-at-Risk (VaR). We test the performance of different VaR methodologies for portfolios with different market capitalization. We perform the analysis considering separately financial crisis periods and non-crisis periods. We find that VaR methods perform differently for portfolios with different market capitalization. For portfolios with stocks of different sizes we obtain better VaR estimates when taking market capitalization into account. We also find that it is important to consider crisis and non-crisis periods separately when estimating VaR across different sizes. This study provides evidence that market fundamentals are relevant for risk measurement.

Is Stock Market Sensitive to Foreign Capital Inflows and Economic Growth? Evidence from Pakistan

Abstract: This study investigates the impact of foreign capital inflows and economic growth on stock market capitalization in Pakistan by using the annual time series data from the period of 1976 to 2011. The ARDL bound testing cointegration approach confirms the valid long run relationship between considered variables. Results indicate that foreign direct investment, workers’ remittances and economic growth have significant positive relationship with the stock market capitalization in long run as well as in short run. Results of dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) suggest that the initial results of long run coefficients are robust. Results of variance decomposition test show the bidirectional causal relationship of foreign direct investment and economic growth with stock market capitalization. However, unidirectional causal relationship is found in between workers’ remittances and stock market capitalization. It is suggested that in Pakistan, investor can make their investment decisions through keep an eye on the direction of the considered foreign capital inflows and economic growth.

Do investors benefit from good corporate governance

Abstract: Purpose – The purpose of this paper is to examine the continuing search for evidence that good corporate governance leads to positive organizational outcomes, and it presents a unique perspective on this issue based on firm size.Design/methodology/approach – The study utilized a comprehensive measure of governance as well as a risk‐adjusted measure of share price in its comparisons between companies known for good governance and broader markets composed of similar‐sized firms.Findings – The findings show evidence of better risk‐adjusted performance across all recent sub‐periods (three‐, five‐, and ten‐year) for the firms in the smallest market capitalization category. Better risk‐adjusted returns were earned for only the ten‐year period for the largest firms and the overall US market. Mid‐cap stocks were not significant in any of the three periods studied. The fact that the small cap stocks showed significance for all three sub‐periods indicates the relationship between good corporate governance practices...

Towards a theory of social responsibility reporting

Abstract: Purpose – Here, the paper aims to model major corporate characteristics associated with corporate social responsibility (CSR) reporting (in particular, its quality). Corporations in China are increasingly expected by the public and government to be more socially responsible. As such, it will be intriguing to ask, what are the characteristics associated with higher quality CSR reporting? Design/methodology/approach – CSR report quality scores are hand-gathered from HEXUN (web site) whilst financial and stock market information from the China Stock Market and Accounting Research (CSMAR) database. A total of 613 CSR reports' quality scores were utilized (Rankins CSR ratings) in the process of developing the model. Reports are hand-gathered from corporations listed on both the Shenzhen and Shanghai stock exchanges (SSE). Findings – The results suggest most interestingly, the quality of CSR report (mandatory) to be strongly, positively related with corporate financial characteristics: market capitalization (co...

The Stock Selection and Performance of Buy-Side Analysts

Abstract: Prior research on equity analysts focuses almost exclusively on those employed by sell-side investment banks and brokerage houses. Yet investment firms undertake their own buy-side research, and their analysts face different stock selection and recommendation incentives than their sell-side peers. We examine the selection and performance of stocks recommended by analysts at a large investment firm relative to those of sell-side analysts from mid-1997 to 2004. We find that the buy-side firm’s analysts issue less optimistic recommendations for stocks with larger market capitalizations and lower return volatility than their sell-side peers, consistent with their facing fewer conflicts of interest and having a preference for liquid stocks. Tests with no controls for these effects indicate that annualized buy-side strong buy/buy recommendations underperform those for sell-side peers by 5.9% using market-adjusted returns and by 3.8% using four-factor model abnormal returns. However, these findings are driven by differences in the stocks recommended and their market capitalization. After controlling for these selection effects, we find no difference in the performance of the buy- and sell-side analysts’ strong buy/buy recommendations.

An Analysis of the Effects of Stock Market Development on Economic Growth in Kenya

Abstract: This paper presents an analysis of the stock market development effects on economic growth in Kenya, using the gross domestic product and the two key measures of stock market – capitalization and trade volume. Empirical results indicate that variables satisfied apriori expectations, are statistically significant, and positively correlated with feed-back effects. Capitalization, trade volume and economic growth are highly positively correlated in Kenya, with capitalization and trade volume jointly explaining 91% of the variations in the economic growth, over the period under study. Further, the study found that a 1% increase in both trade volume and capitalization causes 0.025% and 0.115% increase in gross domestic product respectively. Thus, empirical evidence shows that stock market development (measured by trade volume and/or capitalization) impacts positively on the economic growth in Kenya.

How to drive value your way

Abstract: The story of the PC industry has been etched in the minds of strategists as a template for how industries evolve in the knowledge economy. In the natural order of things, so the story goes, industries disaggregate as interfaces between various stages of the value chain become open and standardized, allowing value to migrate up or down the value chain. But value migration away from established players doesn't have to be inevitable, argue authors Michael Jacobides and John Paul MacDuffie. Auto manufacturers, for example, have kept a fairly constant share of their industry's total market capitalization despite much recourse to outsourcing and intense competition in the sector. Carmakers and other industry leaders like Apple and Google gain and hold on to strategic control and value in their industries in four key ways: 1. Controlling the assets least likely to be commoditized (and blocking others' efforts to do the same) 2. Serving as "guarantor of quality" to the end customer (including assuming responsibility for the entire product, even components made by suppliers) 3. Staying in close touch with changing customer needs (changes in the end consumer are often accompanied by shifts in who captures the most value in an industry) 4. Balancing the imperatives of growth and strategic control of the value chain Through the lens of the auto industry, the authors look at how established players can defend value in their industries and how emerging players can change the competitive landscape to drive value their way. INSETS: Idea in Brief;Cars and Computers: Where Has All the Value Gone?;Industry Stability and Creative Stagnation;How Incumbents and Challengers Shift Value.

Law, finance and innovation: the dark side of shareholder protection

Abstract: Proponents of minority shareholder protection state that national legal institutions protecting small investors boost stock markets and, in turn, the long-term performance of countries. In this paper we empirically challenge this argument. We perform three-stage least squares estimation on a sample of 48 countries during 1993–2006 and find that countries with stronger shareholder protection tend to have larger market capitalisation but also lower innovative activity. We cope with stock market endogeneity and industry heterogeneity, and circumvent omitted variables bias, so that this finding is unlikely to be driven by misspecification problems. The estimation results are interpreted, arguing that stronger shareholder protection may depress rather than encourage the most valuable corporate productions, because it enables small and diversified shareholders to play opportunistic actions against undiversified stockholders, after specific investments are undertaken by the company; innovative activity, largely based on specific investing, is particularly exposed to this problem. Copyright , Oxford University Press.

Size, Value, and Momentum in Developed Country Equity Returns: Macroeconomic and Liquidity Exposures

Abstract: The paper investigates value and momentum factors in 23 developed international stock markets. We find that typically value and momentum premia are smaller and more negatively correlated for large market capitalization stocks relative to small. Momentum factors are more highly correlated internationally relative to value. We provide international evidence on three sets of risk exposures of value and momentum returns: macroeconomic risk, funding liquidity risk, and stock market liquidity risk. We find that value returns are typically lower prior to a recession while momentum returns often exhibit little sensitivity. Value returns are typically lower in times of poor funding liquidity, whereas, with notable exceptions, momentum returns are typically unaffected. Lastly, for almost all countries, value returns are high in poor stock market liquidity conditions. The same result appears to be true for momentum in Asia Pacific, North America, and largely in Europe.

The Impact of Capital Market and Economic Growth in Nigeria.

Abstract: The Nigerian capital market has witnessed obvious transformation over the years, evident by the increased level of participation of the private and public investors at the floor of the stock exchange and in various public offers of quoted companies. The emerging market has also attracted and embraced the attention and the interest of international investors, thus increasing capital inflow. The overall market capitalisation had risen from 1,698.1 million naira in 1980 to 7030.8 billion naira in 2009, thus signifying an increase within the period. Transaction at the floor of NSE has risen to a total of 685716.2 million naira in 2009 from a previous value of 16.6m recorded in 1970. From the result obtained, capital market has positive and significant impact on economic growth in Nigeria. The capital market variables captured in the model such as market capitalization, number of deals and value of transactions were all positive and significant in promoting economic growth in Nigeria. It is important that the government should implement policies that will make the market more efficient and re-position it for growth within the Nigerian economy. Keywords: Capital Market, Economic Growth, Stock Exchange, Market Capitalisation.

Foreign ownership, capital structure and firm performance : empirical evidence from Vietnamese listed firms

Abstract: (ProQuest: ... denotes formulae omitted.)IntroductionIn Vietnam, ownership structure is a major issue of most firms. In the past, most firms were state-owned enterprises that relied on the government for sources of finance. However, with the mid-1980's economic reform, a number of firms were privatized and there has been a dramatic growth in new firms with diverse ownership structures, including private, foreign and joint-stock companies. In addition, the establishment of Ho Chi Minh Stock Exchange in 2000 is also an important part of economic development in Vietnam. Particularly, market capitalization value increased significantly, from only US$154 mn in 2003 to US$20.385 bn in 2010. With the growth of the stock exchange, there was a change in the ownership structure of corporations in Vietnam.1 Foreign ownership gradually became an essential part of ownership structure in both non-listed and listed firms due to the boom in foreign investment inflow. However, there is no research using a detailed dataset to examine the link among foreign ownership, capital structure and firm performance in Vietnam.Research till date has focused on diversified aspects of ownership structure. In recent literature, ownership structure appears as an important factor that affects the firm performance and capital structure as well. However, theoretical arguments still cannot indicate explicitly these relations and empirical evidence shows mixed results (Morck et al., 1988; and Margaritis and Psillaki, 2010). Studies on the relationship between ownership structure and firm performance often consider the managerial ownership, large shareholders' ownership, and the concentration (or dispersion) of ownership structure. However, there is not much empirical evidence about the influence of foreign ownership on capital structure and firm performance. Meanwhile, foreign ownership has become common and plays an important role in emerging economies due to the sharp increase in foreign investment. With regard to relationship between ownership structure and capital structure, there are few studies that examine the relationship between ownership structure and capital structure (Margaritis and Psillaki, 2010; and Ruan et ai, 2011). In detail, studies that link ownership structure to capital structure only attempt to identify the determinants of capital structure. It is necessary to deeply investigate the connections between ownership structure and capital structure, especially in emerging economies.Besides, after the economic reforms in 1986, Vietnam became an emerging market and occupies a considerable position in emerging countries as well as in the world economy. Indeed, Vietnam is one of the nations that has a high economic growth rate among the developing Asian countries (IMF, 2010).2 Moreover, compared to other transitional markets such as the Eastern European countries, Vietnam's economy has performed successfully (Donor, 2011). According to the Emerging Markets Opportunity Index 2010 of Grant Thornton (2010), Vietnam occupies the 16th position. Therefore, a study examining these relationships in Vietnam is essential. Against this backdrop, the purpose of this study is to investigate: (1) the effect of foreign ownership on capital structure; and (2) the impact of foreign ownership on firm performance.The rest of the paper is organized as follows: it reviews the related literature and develops the hypotheses, followed by a description of the methodology used and specification of the empirical models. Subsequently, it discusses the results, and finally, offers the conclusion.Literature Review and Hypotheses DevelopmentAgency theory introduced by Jensen and Meckling (1976) and Jensen (1986) is mostly used to interpret the relationships between ownership structure, capital structure andfirm performance. Agency theory suggests that a separation of management and ownership creates agency cost since managers may not align their own interest with those of the shareholders. …

Valuation of Innovation and Intellectual Property: The Case of iPhone

Abstract: We use data on both daily stock returns and internet activity to estimate the value of Apple's iPhone and related intellectual property. We find the private value of iPhone to be 10%–13% of Apple's market cap. Grounded in the resource-based theory, we argue that much of this value stems from Apple's managerial capabilities to capitalize on the product, as proprietary technology explains about 25% of the private value. This effect arises from patent applications, rather than grants or trademarks. Our analysis of the global supply chain of iPhone suggests that besides Apple, firms in the supply chain are able to capture very limited value from iPhone. These results support the theory of dynamic capabilities, maintaining that a firm's unique dynamic managerial and organizational capabilities are crucial for value creation in globally competitive innovative industries.

Merger and acquisition evaluation and decision making model

Abstract: Based on three merger and acquisition (MA expected stock dividend is ranked as the most important criterion, followed by stock price/earnings per share, stock dividend growth, sales/market capitalization ratio, discount rate, replacement value, and liquidation value. This study uses Vlsekriterijumska Optimizacija I Kompromisno Resenje (VIKOR) to evaluate the performance of three Taiwanese banks. The results show that Bank B is the best M&A investment choice. Finally, the study establishes a comprehensive M&A decision making evaluation model.