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Is attack the best form of defence? A competing risks analysis of acquisition activity in the UK

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  • Andrew P. Dickerson
  • Heather D. Gibson
  • Euclid Tsakalotos

Abstract

The 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 Info

Article provided by Oxford University Press in its journal Cambridge Journal of Economics.

Volume (Year): 27 (2003)
Issue (Month): 3 (May)
Pages: 337-357

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Handle: RePEc:oup:cambje:v:27:y:2003:i:3:p:337-357

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Cited by:
  1. Alessandra Amendola & Marialuisa Restaino & Luca Sensini, 2013. "Corporate Financial Distress And Bankruptcy: A Comparative Analysis In France, Italy And Spain," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences & Institute for World Economy of the Romanian Academy, vol. 1(2), pages 131-142, November.
  2. repec:ntu:ntugeo:vol1-iss2s-13-131 is not listed on IDEAS
  3. Dimara, Efthalia & Tzelepis, Dimitris & Skuras, Dimitris, 2000. "Regional Development Incentives And Firm Survival: A Case Study Of The Greek Food Sector," ERSA conference papers ersa00p209, European Regional Science Association.
  4. Eleni Angelopoulou & Heather D. Gibson, 2007. "The Balance Sheet Channel of Monetary Policy Transmission: Evidence from the UK," Working Papers 53, Bank of Greece.
  5. Andy Cosh & Alan Hughes, 2008. "Takeovers after "Takeovers"," ESRC Centre for Business Research - Working Papers wp363, ESRC Centre for Business Research.

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