ABSTRACT
Mergers and acquisitions (M&As) are expected to generate more efficiency on three grounds. First is through the re-organization of production, second, more efficient allocation of inputs, especially in the case of vertical mergers it enables to get the inputs at lower prices, and third by providing expanded sales and distribution network. This chapter attempts to understand whether the surviving firms could generate the expected efficiency effects from M&As in India. It discusses the measurement of efficiency with M&As. According to M. J. Farrell, economic efficiency is classified into technical and allocative. The chapter then discusses the variables construction and the sources of data. Capital stock is a "composite commodity", which consists of different types of goods and this will change over time. The chapter also follows the methodology used by V. Srivastava to measure capital stock. In the case of drugs and pharmaceutical industry, the technical efficiency of domestic firms increased during the post-M&As period for 1997 deals.
