The Determinants of Merger Waves: An International Perspective
AbstractOne of the most conspicuous features of mergers is that they come in waves that are correlated with increases in share prices and price/earnings ratios. We use a natural way to discriminate between pure stock market influences on firm decisions and other influences by examining merger patterns for both listed and unlisted firms. If "real" changes in the economy drive merger waves, as some neoclassical theories of mergers predict, both listed and unlisted firms should experience waves. We find significant differences between listed and unlisted firms as predicted by behavioral theories of merger waves. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-076.
Date of creation: 2008
Date of revision:
Merger waves; listed versus non-listed firms; managerial discretion; overvaluation;
Find related papers by JEL classification:
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- G3 - Financial Economics - - Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-03 (All new papers)
- NEP-BEC-2009-01-03 (Business Economics)
- NEP-COM-2009-01-03 (Industrial Competition)
- NEP-IND-2009-01-03 (Industrial Organization)
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- Rabin Hattari & Ramkishen S. Rajan, 2009. "Cross-border Mergers and Acquisitions (M&As) in Developing Asia: The Role of Financial Variables," Working Papers 362009, Hong Kong Institute for Monetary Research.
- Chak Hung J. Cheng & Michael K. Salemi, 2009. "Feast and Famine: Explaining Big Swings in the Hong Kong Economy between 1981 and 2007," Working Papers 372009, Hong Kong Institute for Monetary Research.
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