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Catch a Wave: The Time Series Behavior of Mergers

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  • Golbe, Devra L
  • White, Lawrence J

Abstract

This paper offers a direct econometric test of the proposition that U.S. merger activity has occurred in waves. The authors fit a set of sine waves to the annual time-series data on mergers and find that the sine curves generally provide significant explanatory power. The parameters are statistically significant and reasonable in magnitudes, and the implied timing of peaks and troughs in merger activity is close to the actual dates of the peaks and troughs in the data. Thus, this formal test confirms what others have observed impressionistically: the data are consistent with a wave characterization. Copyright 1993 by MIT Press.

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  • Golbe, Devra L & White, Lawrence J, 1993. "Catch a Wave: The Time Series Behavior of Mergers," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 493-499, August.
    • Handle: RePEc:tpr:restat:v:75:y:1993:i:3:p:493-99
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    Cited by:

    1. Barkoulas, John T. & Baum, Christopher F. & Chakraborty, Atreya, 2001. "Waves and persistence in merger and acquisition activity," Economics Letters, Elsevier, vol. 70(2), pages 237-243, February.
    2. Hsueh, Shun-Jen & Tsao, Yao Chun & Tu, Chien-Heng & Chiu, Yung-Ho & Liu, Shu-Bing, 2014. "Can M&A activities act as a predictor of the performance of economic growth or stock prices?," Economic Modelling, Elsevier, vol. 42(C), pages 430-438.
    3. Uddin, Moshfique & Boateng, Agyenim, 2011. "Explaining the trends in the UK cross-border mergers & acquisitions: An analysis of macro-economic factors," International Business Review, Elsevier, vol. 20(5), pages 547-556, October.
    4. Hsu, Kuang-Chung & Wright, Michael & Zhu, Zhen, 2017. "What motivates merger and acquisition activities in the upstream oil & gas sectors in the U.S.?," Energy Economics, Elsevier, vol. 65(C), pages 240-250.
    5. Gärtner, Dennis L. & Halbheer, Daniel, 2009. "Are there waves in merger activity after all?," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 708-718, November.
    6. Shelton, Lois M., 2000. "Merger market dynamics: insights into the behavior of target and bidder firms," Journal of Economic Behavior & Organization, Elsevier, vol. 41(4), pages 363-383, April.
    7. Martynova, Marina & Renneboog, Luc, 2008. "A century of corporate takeovers: What have we learned and where do we stand?," Journal of Banking & Finance, Elsevier, vol. 32(10), pages 2148-2177, October.
    8. Joseph A. Clougherty & Jo Seldeslachts, 2013. "The Deterrence Effects of US Merger Policy Instruments," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(5), pages 1114-1144, October.
    9. König, Michael D. & Rogers, Tim, 2023. "Endogenous technology cycles in dynamic R&D networks," European Economic Review, Elsevier, vol. 158(C).
    10. Marcelo Resende, 2012. "Long Memory in Mergers and Acquisitions: Sectoral Evidence for an Emerging Economy," Economics Bulletin, AccessEcon, vol. 32(4), pages 2876-2883.
    11. Hagedoorn, John & van Kranenburg, Hans, 2003. "Growth patterns in R&D partnerships: an exploratory statistical study," International Journal of Industrial Organization, Elsevier, vol. 21(4), pages 517-531, April.
    12. Khiar, Mohamed Nasrallah & Kooli, Maher, 2024. "Culture and exit mechanisms: International evidence," Global Finance Journal, Elsevier, vol. 61(C).
    13. Bernardo Batiz-Lazo & Andrew Edwards, 2015. "Was Thatcherism Another Case of British Exceptionalism? A Provocation," Working Papers 15008, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).

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