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How Lithium Prices Affect Mergers and Acquisitions in the Lithium Industry

Author

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  • Manuel Monge
  • Enrique Cristobal
  • Luis A. Gil-Alana

    (Universidad Francisco de Vitoria (UFV), Madrid, Spain)

Abstract

Is lithium affecting business strategies in the sector? We employ methodologies based on Continuous Wavelet Transform (CWT) and fractional integration and cointegration vector autoregressive models (FCVAR) models to analyze how lithium prices influence mergers and acquisitions (M&A) in the lithium industry over the world. The univariate and the multivariate results obtained using long memory methods support the nonstationary nature of the data, but they seem to be linked in the long-term through a fractional cointegrated relationship. In addition, analysis in the time-frequency domain indicates that both series are highly correlated from 2015 to 2017, finding that the lithium prices explain the M&A behavior after mid-2016 until early 2017.

Suggested Citation

  • Manuel Monge & Enrique Cristobal & Luis A. Gil-Alana, 2021. "How Lithium Prices Affect Mergers and Acquisitions in the Lithium Industry," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 11(1), pages 26-34.
    • Handle: RePEc:afj:journ3:v:11:y:2021:i:1:p:26-34
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-rdfin-v11-n1-a2
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    Cited by:

    1. Jingyi Zhong & Weide Chun & Wu Deng & Hui Gao, 2023. "Can Mergers and Acquisitions Promote Technological Innovation in the New Energy Industry? An Empirical Analysis Based on China’s Lithium Battery Industry," Sustainability, MDPI, vol. 15(16), pages 1-25, August.

    More about this item

    Keywords

    Lithium industry; lithium prices; M&A; fractional integration; fractional cointegration; wavelets;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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