Mergers and Efficiency: Changes Across TimeMergers And Efficiency: Changes Across Time focuses on one aspect of the corporate finance revolution that restructured Corporate America and led to the longest expansion in U.S. history - changes in rates of merger efficiency. Demystifying this most controversial and dynamic period of U.S. economic history is key to understanding the business, financial and economic innovations that defined the last two decades of the 20th century. In addition, it is important to create a careful empirical understanding of the conditions under which merger activity increased or decreased firm efficiency, industrial productivity, and overall improvements in aggregate output and economic performance. The first chapter examines the aggregate data set by modeling the determinants of the risk of takeover. Next, the author takes a closer look at possible heterogeneity among targets in takeovers. The second chapter analyzes the categories previously discussed in the literature, such as target resistance and management dismissals. Finally, the author examines what, if any, efficiency improvements were realized after the takeover. The third and final chapter examines the ex post performance of combined firms using fixed effects panel data models. These models have the advantage over the univariate methodologies or regressions used in earlier studies of being able to control for the prior performance of the firm. |
Contents
INEFFICIENCY AS DETERMINANT OF THE RISK OF TAKEOVER | 1 |
I CURRENT KNOWLEDGE | 5 |
II PERFORMANCE MEASURES | 9 |
III SAMPLE AND DATA DESCRIPTION | 13 |
IV DESCRIPTIVE STATISTICS | 17 |
V COX REGRESSION MODEL | 26 |
VI INITIAL ESTIMATION OF THE HAZARD OF TAKEOVER | 35 |
VII BUILDING MODELS FOR THE DETERMINANTS OF TAKEOVERS | 39 |
BUYER TYPES | 100 |
VI PRIOR STUDIES ON TARGETS OF DIFFERENT BUYER TYPES | 102 |
VII DESCRIPTIVE STATISTICS | 104 |
VIII MODELS | 105 |
IX CONCLUSIONS | 113 |
THE EFFICIENCY EFFECTS OF TAKEOVERS | 115 |
I PRIOR RESEARCH ON POSTTAKEOVER PERFORMANCE | 119 |
III DESCRIPTIVE STATISTICS | 123 |
ISORISK CURVES | 61 |
IX CONCLUSIONS | 71 |
HETEROGENEITY IN THE TARGETS OF TAKEOVERS | 73 |
I PRIOR STUDIES ON HETEROGENEITY | 76 |
II ADDITIONAL DATA | 80 |
III DESCRIPTIVE STATISTICS | 82 |
IV MODELS | 91 |
V DISCUSSION | 99 |
IV ECONOMETRIC CONSIDERATIONS | 131 |
V RESULTS | 135 |
VI CONCLUSIONS | 148 |
Appendix 1A | 151 |
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