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The determinants of merger waves: An international perspective

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  • Gugler, Klaus
  • Mueller, Dennis C.
  • Weichselbaumer, Michael

Abstract

One 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.

Suggested Citation

  • Gugler, Klaus & Mueller, Dennis C. & Weichselbaumer, Michael, 2012. "The determinants of merger waves: An international perspective," International Journal of Industrial Organization, Elsevier, vol. 30(1), pages 1-15.
    • Handle: RePEc:eee:indorg:v:30:y:2012:i:1:p:1-15
    DOI: 10.1016/j.ijindorg.2011.04.006
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    More about this item

    Keywords

    Merger waves; Listed versus unlisted firms; Managerial discretion; Overvaluation;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • G3 - Financial Economics - - Corporate Finance and Governance

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