Are there waves in merger activity after all?

This paper investigates the merger wave hypothesis for the US and the UK employing a Markov regime-switching model. Using quarterly data covering the last 30 years, for the US, we identify the beginning of a merger wave in the mid 1990s but not the much-discussed 1980s merger wave. We argue that the...

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Bibliographic Details
Published in:International journal of industrial organization 2009-11, Vol.27 (6), p.708-718
Main Authors: Gärtner, Dennis L., Halbheer, Daniel
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Comparative analysis
Economic activity
Economic concentration
Economic history
Gibbs sampling
Markov analysis
Markov regime-switching regression model
Markovian processes
Merger waves
Merger waves Markov regime-switching regression model Gibbs sampling
Mergers
Sample surveys
Sampling
Stochastic models
Studies
U.S.A
United Kingdom
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Summary:This paper investigates the merger wave hypothesis for the US and the UK employing a Markov regime-switching model. Using quarterly data covering the last 30 years, for the US, we identify the beginning of a merger wave in the mid 1990s but not the much-discussed 1980s merger wave. We argue that the latter finding can be ascribed to the refined methods of inference offered by the Gibbs sampling approach. As opposed to the US, mergers in the UK exhibit multiple waves, with activity surging in the early 1970s and the late 1980s.
ISSN:0167-7187
1873-7986
DOI:10.1016/j.ijindorg.2009.03.003