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Mimetic isomorphism and its effect on merger and acquisition activities in Taiwanese financial industries

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  • Jen-Jen Tseng
  • Ping-Hung Chou

Abstract

This paper adopts an institutional theory and explores the impact of institutional pressures on mimetic isomorphism in merger and acquisition (M&A) activities. It uses 117 M&A announcements and adopts a logistic regression model to construct a probability model for mimetic isomorphism. This study finds that a firm's own M&A experiences and the frequency of M&A deals are positively correlated with the likelihood that a firm will complete its M&A deal. This paper also utilizes an event study methodology to estimate the excess return around M&A announcements as a proxy for the M&A performance and adopts the OLS regression model to analyse the relation between the imitation and M&A performances. There is a positive relation between the frequency of M&A activities and M&A performances, and a negative relation between a firm's own M&A experiences and M&A performances.

Suggested Citation

  • Jen-Jen Tseng & Ping-Hung Chou, 2009. "Mimetic isomorphism and its effect on merger and acquisition activities in Taiwanese financial industries," The Service Industries Journal, Taylor & Francis Journals, vol. 31(9), pages 1451-1469, November.
    • Handle: RePEc:taf:servic:v:31:y:2009:i:9:p:1451-1469
    DOI: 10.1080/02642060903580573
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    References listed on IDEAS

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    4. DeLong, Gayle L., 2001. "Stockholder gains from focusing versus diversifying bank mergers," Journal of Financial Economics, Elsevier, vol. 59(2), pages 221-252, February.
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    6. Jane W Lu, 2002. "Intra- and Inter-organizational Imitative Behavior: Institutional Influences on Japanese Firms' Entry Mode Choice," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(1), pages 19-37, March.
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