Waves and determinants in the activity of Mergers and Acquisitions: The Case of Latin America
AbstractThis paper contributes to the current literature of mergers and acquisitions (M&As) by studying the existence of waves and the determinants of M&A activity in the economies of Argentina, Brazil, Chile, Colombia, Mexico and Peru. From a sample of 2,490 M&As announcements reported by Thomson One for these countries, and applying the methodology proposed by Harford (2005), evidence of M&A waves is found for the periods 1993-2002 and 2003-2010 as reported for other regions in various international studies. After controlling for economic and business environment variables, as well as for profitability and book-to-market variables at industry level, we find evidence in favor of the neoclassical theory as a main explanation for M&As, but not for the misvaluation effect. For this purpose, a Prais-Winsten data model with panel corrected standard errors (PCSE) is used, and the results are confirmed through a negative binomial panel data estimation.
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Bibliographic InfoPaper provided by UNIVERSIDAD EAFIT in its series DOCUMENTOS DE TRABAJO CIEF with number 010658.
Date of creation: 02 Dec 2012
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Mergers and Acquisitions; Latin American Economics; PCSE ; Counting Models;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-30 (All new papers)
- NEP-EFF-2013-03-30 (Efficiency & Productivity)
- NEP-LAM-2013-03-30 (Central & South America)
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