This study statistically analyzes the changes in the firms' performance after merger using 186 merging firm from 1987 to 2004. In this research, we closely looked at the economic performance changes made to the merging firms before and after the crisis. For the analysis, we observed the companies' profitability, the output growth and the total factor productivity(TFP) growth. The analysis showed it clear that there has been significant improvement of post-merger performance after the financial crisis.  

After the crisis, a lot of changes have been made in the laws and polices regarding the M&A in positive ways. The number of M&As significantly increased after the crisis and the changes made on the policies relating to the M&A boosted the profitability and the TFP growth of merging firms. 

First, we analyzed the profitability, growth rate and the productivity of merging firms during the period after the crisis and the period before the crisis. While the merging firms showed decreased profitability before the crisis, the merging firms after crisis showed increase in profitability. Also, it is clear that the merger made before the crisis did not show productivity improvement. However, after the crisis merging firms clearly showed the productivity improvement. This indicates that merger of firms have played roles of primarily raising the efficiency during the post-merger period. 

Secondly, M&A of non-chaebol and chaebol showed low improvement in profitability, output growth and productivity during the period before the crisis. Nevertheless, M&A of non-chaebol and chaebol firms turned out to be dramatically improved performance after the crisis. Especially the merger increased the performance of chaebol firms in profitability and productivity.  

Thirdly, the merger within the same industry before the economic crisis did not show much of improvement in productivity and profitability, but showed higher rates of output growth. Also, the merger between the different industries before the crisis showed reduced output growth rate and profitability. After the crisis, the merger within the same industry demonstrated performance improvement in productivity, output growth and profitability. However, no signs of increase in growth rate were seen. In addition, for the merging firms of between different industries, the profitability and productivity increased. Based on the entire merger samples including both the pre-and post-crisis, elevated level of economic performance does not stand out. According to these samples, profitability and output growth rate during the post-merger period did not show significant improvement, but showed larger increase in TFP growth. 

This big improvement in productivity is presumed to have been brought about by the Korean government's flexible labour market management in merger and reductions of machinery and equipments. Considering that most of firms intended to improve the economic performance by eliminating the unwanted capacity and labor, the greatly improved profitability and productivity after the crisis is not that surprising. Non-chaebol and chaebol firms displayed improved productivity after the merger, which led to the improvement of management efficiency.