The impact of SPAC Mergers on Financial Performance and Growth: Evidence from Italian Market

This study examines the impact of SPAC mergers on the financial performance of Italian firms, focusing on profitability (ROE, ROI), sales growth, and workforce expansion. A sample of business combinations completed between 2015 and 2019 is analyzed using firm-level data from 2013 to 2022. A Propensity Score Matching (PSM) and Difference-in Differences (DiD) methodology is applied to control for selection bias and assess the causal effects of SPAC mergers. Additionally, non-linear quantile regression is used to capture the heterogeneous effects across firms. The results show a significant decline in profitability post-merger, particularly in ROE and ROI, likely due to integration challenges. While sales growth improves overall, the non-linear analysis reveals that only a subset of firms experiences significant revenue growth. The findings highlight the importance of strategic planning and regulatory oversight in optimizing SPAC mergers, addressing a critical gap in the Italian market where research is limited. This analysis provides valuable insights for managers and policymakers navigating the evolving SPAC landscape in Italy.