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Merger activity and unemployment in the USA

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  • K. P. Upadhyaya
  • F. G. Mixon

Abstract

This article presents estimates of the effect of merger activity on the unemployment rate in the US economy using time-series data from 1895 to 1992. Utilizing the methodology suggested by Wickens and Breusch (Economic Journal, Supplement, 189-205, 1988), both the short-run and long-run impacts are estimated. The estimated results suggest that merger activity had a significant negative effect on the unemployment rate in the long run. Even in the short run, merger activity, at the margin, has helped to reduce the unemployment rate.

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  • K. P. Upadhyaya & F. G. Mixon, 2003. "Merger activity and unemployment in the USA," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 705-707.
    • Handle: RePEc:taf:apeclt:v:10:y:2003:i:11:p:705-707
    DOI: 10.1080/1350485032000136342
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    References listed on IDEAS

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    1. Peter C.B. Phillips & Pierre Perron, 1986. "Testing for a Unit Root in Time Series Regression," Cowles Foundation Discussion Papers 795R, Cowles Foundation for Research in Economics, Yale University, revised Sep 1987.
    2. Scherer, F M, 1988. "Corporate Takeovers: The Efficiency Arguments," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 69-82, Winter.
    3. Bewley, R. A., 1979. "The direct estimation of the equilibrium response in a linear dynamic model," Economics Letters, Elsevier, vol. 3(4), pages 357-361.
    4. Phillips, P C B, 1987. "Time Series Regression with a Unit Root," Econometrica, Econometric Society, vol. 55(2), pages 277-301, March.
    5. Breusch, Trevor S & Wickens, Michael R., 1987. "Dynamic Specification, the Long Run and the Estimation of Transformed Regression Models," CEPR Discussion Papers 154, C.E.P.R. Discussion Papers.
    6. James G. MacKinnon, 1990. "Critical Values for Cointegration Tests," Working Paper 1227, Economics Department, Queen's University.
    7. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    8. Jensen, Michael C, 1988. "Takeovers: Their Causes and Consequences," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 21-48, Winter.
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    Cited by:

    1. Oliver Budzinski & Jürgen-Peter Kretschmer, 2009. "Horizontal Mergers, Involuntary Unemployment, and Welfare," MAGKS Papers on Economics 200907, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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