This study investigates whether the post-merger bad performance of merging firms was caused by the increase of cost and which cost is responsible for that, if it were. To do this, it is investigated whether there is any difference in terms of cost between pre-merger versus post-merger firms. Also the comparison of cost is used between merging firms and non-merging control groups. The finding is that the merging firms have a bigger cost than the non-merging control group and the post-merger firms have a bigger cost than the pre-merger firms. Especially labor cost to revenue and depreciation cost to revenue are statistically very different among them. Thus it is suggested that there are inefficiency of manpower and assets.