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Do Mergers Lead to Monopoly in the Long Run? Results from the Dominant Firm Model

Gowrisankaran, Gautam; Holmes, Thomas J. - 2022

Will an industry with no antitrust policy converge to monopoly, competition, or somewhere in between? We analyze this question using a dynamic dominant firm model with rational agents, endogenous mergers, and constant returns to scale production. We find that perfect competition and monopoly are...

Persistent link: https://www.econbiz.de/10014109128

Corporate Liquidity, Acquisitions, and Macroeconomic Conditions

Erel, Isil - 2017

Firms hold liquid assets to enhance their ability to invest efficiently when external financing costs are high, especially during poor macroeconomic conditions. Using a sample of 47,378 acquisitions from 36 countries between 1997 and 2014, we study how the relation between firms' cash holdings...

Persistent link: https://www.econbiz.de/10012954455

Acquiring Banking Networks

Levine, Ross - 2017

Does the pre-deal geographic overlap of the subsidiaries and branches of two banks affect the probability that they merge and post-merger value creation and synergies? We compile comprehensive information on U.S. bank acquisitions from 1986 through 2014, construct several measures of network...

Persistent link: https://www.econbiz.de/10012954925

Charters Without Lotteries : Testing Takeovers in New Orleans and Boston

Abdulkadiroglu, Atila - 2014

attendance: the grandfathering instrument compares students at schools designated for takeover with students who appear similar … exclusion restriction in such comparisons. Estimates for a large sample of takeover schools in the New Orleans Recovery School … District show substantial gains from takeover enrollment. In Boston, where we can compare grandfathering and lottery estimates …

Persistent link: https://www.econbiz.de/10013039631

Evidence for the Effects of Mergers on Market Power and Efficiency

Blonigen, Bruce A. - 2016

Study of the impact of mergers and acquisitions (M&As) on productivity and market power has been complicated by the difficulty of separating these two effects. We use newly-developed techniques to separately estimate productivity and markups across a wide range of industries using detailed...

Persistent link: https://www.econbiz.de/10012980667

Buyout Activity : The Impact of Aggregate Discount Rates

Haddad, Valentin - 2016

Buyout booms form in response to declines in the aggregate risk premium. We document that the equity risk premium is the primary determinant of buyout activity rather than credit-specific conditions. We articulate a simple explanation for this phenomenon: a low risk premium increases the present...

Persistent link: https://www.econbiz.de/10012986691

Behavioral Corporate Finance

Malmendier, Ulrike - 2018

Behavioral Corporate Finance provides new and testable explanations for long-standing corporate-finance puzzles by applying insights from psychology to the behavior of investors, managers, and third parties (e. g., analysts or bankers). This chapter gives an overview of the three leading streams...

Persistent link: https://www.econbiz.de/10012909497

An Assignment Theory of Foreign Direct Investment

Nocke, Volker; Yeaple, Stephen R. - 2021

We develop an assignment theory to analyze the volume and composition of foreign direct investment (FDI). Firms conduct FDI by either engaging in greenfield investment or in cross-border acquisitions. Cross-border acquisitions involve firms trading heterogeneous corporate assets to exploit...

Persistent link: https://www.econbiz.de/10013218332

Mergers and the Composition of International Commerce

Nocke, Volker; Yeaple, Stephen R. - 2021

In this paper, we develop a novel theory of cross-border mergers and acquisitions. Firms can choose between different modes of foreign market access: exporting, greenfield FDI, and cross-border M&A. Our theory is based on three key ideas. First is heterogeneity in firms' capabilities. Second,...

Persistent link: https://www.econbiz.de/10013224696

Foreign Entry into U.S. Manufacturing by Takeovers and the Creation of New Firms

Lipsey, Robert E.; Feliciano, Zadia Maria - 2021

Using U.S. Bureau of Economic Analysis data for individual foreign acquisitions and new establishments in the U.S from 1988 to 1998, and aggregate data for 1980 to 1998, we find that acquisitions and establishments of new firms tend to occur in periods of high U.S. growth and take place mainly...

Persistent link: https://www.econbiz.de/10013224850