Is attack the best form of defence? A competing risks analysis of acquisition activity in the UK
AbstractThe primary purpose of this paper is to investigate whether companies can use acquisition as a strategy to reduce their likelihood of take-over. The determinants of making an acquisition and being taken over are modelled for the first time within a competing risks framework using two large samples of UK manufacturing companies which together cover most of the post-World War II period up to 1990. Our results indicate that, ceteris paribus, companies which make acquisitions can significantly reduce their conditional probability of being taken over by around one-third, largely through the impact that acquisition has on corporate size. In this sense, attack, through acquisition, is the best form of defence against take-over. Copyright 2003, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Cambridge Journal of Economics.
Volume (Year): 27 (2003)
Issue (Month): 3 (May)
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Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
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Other versions of this item:
- Andrew P. Dickerson & Heather D. Gibson & Euclid Tsakalotos, 1999. "Is Attack the Best form of Defence? A Competing Risks Analysis of Acquisition Activity in the UK," Studies in Economics 9907, Department of Economics, University of Kent.
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
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