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The relationship between optimism and merger and acquisition waves: Evidence from the Brazilian market

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  • Fonseca, Rodrigo Raposo da
  • Almeida, Vinicio de Souza e

Abstract

The reason why mergers and acquisitions occur in waves is still a subject rarely explored in the financial literature, especially in a context of markets outside the USA and UK. Therefore, the present study investigates whether the optimism of the agents could led to a wave of M&A, using Brazilian data from 2007 to 2017 of transactions and the Business Confidence Index, wich measures the optimism of the entrepreneurs about the current and future economy scenario. We used Harford (2005)’s definition for a M&A wave. Using a Logit binary response model, the study pointed out that optimism increasesthe probability of M&A wave. Ibovespa was the variable that had the greater effect on the probabilities of a M&A wave. The results were significant for different lags

Suggested Citation

  • Fonseca, Rodrigo Raposo da & Almeida, Vinicio de Souza e, 2022. "The relationship between optimism and merger and acquisition waves: Evidence from the Brazilian market," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 63(1), December.
    • Handle: RePEc:fgv:eaerae:v:63:y:2022:i:1:a:88571
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