Mergers and Technological Change: 1885-1998
We analyze mergers over the past century in a growth model that emphasizes technological change. We explain the positive relation between mergers and stock prices, the positive relation between internal growth of firms and their acquisitions, and the positive relation of mergers with other measures of reallocation such as entry and exit. More broadly, mergers help firms to reallocate assets more smoothly, thereby raising returns to investment and the growth rate. We also find that merger waves are shorter when technological change is more dramatic, when the capital of other firms is less costly to transfer, and when entry and exit are a smooth reallocation mechanism. This last result underscores that entry and exit on the one hand and mergers on the other are substitute means of reallocation..
|Date of creation:||Aug 2001|
|Contact details of provider:|| Web page: http://www.vanderbilt.edu/econ/wparchive/index.html|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert J. Gordon, 1986. "The American Business Cycle: Continuity and Change," NBER Books, National Bureau of Economic Research, Inc, number gord86-1.
- Pakes, Ariel S, 1986.
"Patents as Options: Some Estimates of the Value of Holding European Patent Stocks,"
Econometric Society, vol. 54(4), pages 755-784, July.
- Ariel Pakes, 1984. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," NBER Working Papers 1340, National Bureau of Economic Research, Inc.
- Robert J. Gordon, 1986. "Front matter, The American Business Cycle. Continuity and Change," NBER Chapters,in: The American Business Cycle: Continuity and Change, pages -15 National Bureau of Economic Research, Inc.
- Ralph L. Nelson, 1959. "Merger Movements in American Industry, 1895-1956," NBER Books, National Bureau of Economic Research, Inc, number nels59-1.
- Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73, pages 110-110.
- Lucas, Robert E, Jr, 1978. "Asset Prices in an Exchange Economy," Econometrica, Econometric Society, vol. 46(6), pages 1429-1445, November.
- Telser,Lester G., 1987. "A Theory of Efficient Cooperation and Competition," Cambridge Books, Cambridge University Press, number 9780521306195, December.
- Michael Gort, 1969. "An Economic Disturbance Theory of Mergers," The Quarterly Journal of Economics, Oxford University Press, vol. 83(4), pages 624-642.
- Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
- Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73, pages 351-351.
- Baker, George P, 1992. " Beatrice: A Study in the Creation and Destruction of Value," Journal of Finance, American Finance Association, vol. 47(3), pages 1081-1119, July.
- Jensen, Michael C, 1988. "Takeovers: Their Causes and Consequences," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 21-48, Winter.
- Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:van:wpaper:0116. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley)
If references are entirely missing, you can add them using this form.