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      Aggregate merger activity and the business cycle

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      Date
      2008
      Author
      Komlenovic, Srdan
      Type
      Thesis
      Degree Level
      Masters
      Metadata
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      Abstract
      This study examines macroeconomic and industry-level factors (with particular emphasis on the business cycle) on industry-level merger activity. In a sample of US mergers from 1979 to 2006, we find that industry level mergers are highly pro-cyclical. The business cycle has a positive and significant impact on both horizontal and non-horizontal mergers, even after controlling for other macroeconomic and industry-level effects. Although macroeconomic variables have similar effects on both horizontal and non-horizontal mergers, industry-level factors vary significantly between the two types of mergers. Horizontal mergers are much more aligned with neo-classical theories, while non-horizontal mergers are more affected by financing constraints and overvaluation. We also find that the determinants and financing preferences of industry-level mergers vary greatly across the business cycle stages, which suggests that the motivation for mergers changes in different economic conditions.
      Degree
      Master of Science (M.Sc.)
      Department
      Finance and Management Science
      Program
      Finance and Management Science
      Supervisor
      Mishra, Dev R.; Mamun, Abdullah
      Committee
      Haque, Mahfuzul; Racine, Marie
      Copyright Date
      2008
      URI
      http://hdl.handle.net/10388/etd-09192008-120854
      Subject
      business cycle
      merger waves
      acquisitions
      mergers
      Collections
      • Graduate Theses and Dissertations
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