Valuation Waves and Merger Activity: The Empirical Evidence

Rhodes‐Kropf, Matthew; Viswanathan, S.; Robinson, David T.

doi:10.2139/ssrn.412680

Cited by 376 publications

(570 citation statements)

References 36 publications

Supporting

Mentioning

525

Contrasting

Unclassified

Order By: Relevance

“…The difference between their model and the one of Shleifer and Vishny (2003) stands mainly in that target management is not just selfconcerned, but has only imperfect information about the magnitude of synergies at its disposal. In a different study, Rhodes-Kropf, Robinson and Viswanathan (2005) show that merger activity peaks when market valuations are high. In addition, they provide evidence of long-run reversal as they show that 2 Our study differs from Rosen"s (2006) approach in two main aspects: First, we directly focus on market valuations to examine acquirer"s performance, while Rosen examines the performance (momentum) of firms with good (or bad) merger history.…”

Section: Related Literature Review and Hypothesis Developmentmentioning

confidence: 95%

What drives acquisitions?

Petmezas

2009

Journal of Multinational Financial Management

View full text Add to dashboard Cite

Section: Related Literature Review and Hypothesis Developmentmentioning

confidence: 95%

What drives acquisitions?

Petmezas

2009

Journal of Multinational Financial Management

View full text Add to dashboard Cite

“…Therefore, we used the following variables that are pervasive in well-reputed M&A literature: (1) SIZE, defined as the natural log of total bidder assets (Moeller et al 2004); FREEFLOAT, defined as the percentage of shares not closely held (Dahlquist et al 2003;Moeller and Schlingemann 2005); TOBINSQ, approximated by the bidder's market-to-book ratio (Bargeron et al 2008;Moeller et al 2004); FREECASH, defined as a bidder's free cash flow in percent of total assets (Lehn and Poulsen 1989); and LEVERAGE, defined as a bidder's long-term debt as a percentage of total assets (Faccio et al 2006;Rhodes-Kropf et al 2005). Moreover, we reflect the current level of diversification among bidders by using the variable ''ENTROPY''.…”

Section: Additional Control Variablesmentioning

confidence: 99%

Lost in transaction? The transfer effect of strategic consistency

Fehre

Kronenwett

Lindstädt

et al. 2015

Bus Res

View full text Add to dashboard Cite

Prior empirical studies provide evidence that the learning-curve perspective from manufacturing settings is not directly applicable to strategic management settings. In the latter case learning relates to the quality rather than to the quantity of experience. Regarding the antecedents of organizational learning especially, there are still unanswered questions remaining; for example, the questions what kind of experience has a positive effect on performance and what kind of experience is more of a hindrance than a help. This becomes obvious when looking at acquisitions as examples of strategic management decisions. Results of prior empirical studies analyzing the relationship of acquisition experience and acquisition performance have been mixed. By introducing the concept of strategic consistency, we intend to facilitate a better understanding of the kind of experience necessary for organizational learning. Therefore, we measure the concordance and frequency of change in strategic actions. Employing a sample of 379 acquisition series, we find evidence for a positive transfer effect of strategic consistency within series and, therefore, a positive relationship between strategic consistency and acquisition performance.

show abstract

“…Research in finance economics (Andrade and Stafford 2004;Harford 2005;Rhodes-Kropf et al 2005), however, has advanced our understanding of merger-wave drivers. Furthermore, holding the wave constant was a crucial feature in the Seldeslachts et al (2009) set-up, as their deterrence manifested as departures in the number of merger notifications from the merger wave.…”

Section: Merger Policy Deterrencementioning

confidence: 99%

The Deterrence Effects of U.S. Merger Policy Instruments

Clougherty

Seldeslachts

2009

SSRN Journal

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: We estimate the deterrence effects of U.S. merger policy instruments with respect to the composition and frequency of future merger notifications. Data from the Annual Reports by the U.S. DOJ and FTC allow industry based measures over the 1986-1999 period of the conditional probabilities for eliciting investigations, challenges, prohibitions, court-wins and court-losses: deterrence variables akin to the traditional conditional probabilities from the economics of crime literature. We find the challenge-rate to robustly deter future horizontal (both relative and absolute) merger activity; the investigation-rate to slightly deter relativehorizontal merger activity; the court-loss-rate to moderately affect absolute-horizontal merger activity; and the prohibition-rate and court-win-rate to not significantly deter future horizontal mergers. Accordingly, the conditional probability of eliciting an antitrust challenge (i.e., remedies and prohibitions) involves the strongest deterrence effect from amongst the different merger policy instruments. Terms of use: Documents in

show abstract

Valuation Waves and Merger Activity: The Empirical Evidence

Cited by 376 publications

References 36 publications

What drives acquisitions?

What drives acquisitions?

Lost in transaction? The transfer effect of strategic consistency

The Deterrence Effects of U.S. Merger Policy Instruments

Contact Info

Product

Resources

About