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A Note on Merger and Acquisition Evaluation

Listed author(s):
  • Furlan, Benjamin

    ()

    (University of Salzburg)

  • Oberhofer, Harald

    ()

    (University of Salzburg)

  • Winner , Hannes

    ()

    (University of Salzburg)

This note proposes the continuous treatment approach as a valuable alternative to propensity score matching for evaluating economic effects of merger and acquisitions (M&A). This framework allows to consider the variation in treatment intensities explicitly, and it does not call for the definition of cut-off values in traded ownership shares in order to construct a binary treatment indicator. We demonstrate the usefulness of this approach using data from European M&As and by relying on the example of post-M&A employment effects.

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Paper provided by University of Salzburg in its series Working Papers in Economics with number 2014-2.

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Length: 11 pages
Date of creation: 07 Mar 2014
Handle: RePEc:ris:sbgwpe:2014_002
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  1. Oberhofer, Harald & Philippovich, Tassilo & Winner, Hannes, 2010. "Distance matters in away games: Evidence from the German football league," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 200-211, April.
  2. Helmut Fryges & Joachim Wagner, 2007. "Exports and Productivity Growth - First Evidence from a Continuous Treatment Approach," Jena Economic Research Papers 2007-063, Friedrich-Schiller-University Jena.
  3. Roger Bandick & Holger Görg, 2010. "Foreign acquisition, plant survival, and employment growth," Canadian Journal of Economics, Canadian Economics Association, vol. 43(2), pages 547-573, May.
  4. Becker, Sascha O. & Egger, Peter & von Ehrlich, Maximilian, 2010. "Too much of a good thing? On the growth effects of the EU's regional policy," CEPR Discussion Papers 8043, C.E.P.R. Discussion Papers.
  5. Jere R. Behrman & Yingmei Cheng & Petra E. Todd, 2004. "Evaluating Preschool Programs When Length of Exposure to the Program Varies: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 108-132, February.
  6. Heckman, James J & Lochner, Lance & Taber, Christopher, 1998. "General-Equilibrium Treatment Effects: A Study of Tuition Policy," American Economic Review, American Economic Association, vol. 88(2), pages 381-386, May.
  7. Conyon, Martin J. & Girma, Sourafel & Thompson, Steve & Wright, Peter W., 2002. "The impact of mergers and acquisitions on company employment in the United Kingdom," European Economic Review, Elsevier, vol. 46(1), pages 31-49, January.
  8. Stiebale, Joel & Trax, Michaela, 2010. "The Effects of Cross-border M&As on the Acquirers' Domestic Performance – Firm-level Evidence," Ruhr Economic Papers 159, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  9. Benjamin Furlan & Harald Oberhofer & Hannes Winner, 2014. "A Note on Merger and Acquisition Evaluation," WIFO Working Papers 462, WIFO.
  10. Donald S. Siegel & Kenneth L. Simons, 2006. "Assessing the Effects of Mergers and Acquisitions on Firm Performance, Plant Productivity, and Workers: New Evidence from Matched Employer-Employee Data," Rensselaer Working Papers in Economics 0601, Rensselaer Polytechnic Institute, Department of Economics.
  11. Leiter, Andrea & Thöni, Magdalena & Winner, Hannes, 2012. "Evaluating human life using court decisions on damages for pain and suffering," International Review of Law and Economics, Elsevier, vol. 32(1), pages 119-128.
  12. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
  13. Gugler, Klaus & Yurtoglu, B. Burcin, 2004. "The effects of mergers on company employment in the USA and Europe," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 481-502, April.
  14. Conyon, Martin J. & Girma, Sourafel & Thompson, Steve & Wright, Peter W., 2001. "Do hostile mergers destroy jobs?," Journal of Economic Behavior & Organization, Elsevier, vol. 45(4), pages 427-440, August.
  15. Leslie E. Papke & Jeffrey M. Wooldridge, 1993. "Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates," NBER Technical Working Papers 0147, National Bureau of Economic Research, Inc.
  16. Harald Oberhofer, 2013. "Employment Effects of Acquisitions: Evidence from Acquired European Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(3), pages 345-363, May.
  17. Lehto, Eero & Böckerman, Petri, 2008. "Analysing the employment effects of mergers and acquisitions," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 112-124, October.
  18. Paetzold, Jörg & van Vliet, Olaf, 2012. "Convergence without hard criteria: Does EU soft law affect domestic unemployment protection schemes?," Working Papers in Economics 2012-9, University of Salzburg.
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