How Lithium Prices Affect Mergers and Acquisitions in the Lithium Industry

Manuel Monge, Enrique Cristobal and Luis Gil-Alana

Review of Development Finance Journal, 2021, vol. 11, issue 1, 26-34

Abstract: Is lithium affecting business strategies in the sector? We employ methodologies based on Continuous Wavelet Transform (CWT) and fractional integration and cointegration vector autoregressive models (FCVAR) models to analyze how lithium prices influence mergers and acquisitions (M&A) in the lithium industry over the world. The univariate and the multivariate results obtained using long memory methods support the nonstationary nature of the data, but they seem to be linked in the long-term through a fractional cointegrated relationship. In addition, analysis in the time-frequency domain indicates that both series are highly correlated from 2015 to 2017, finding that the lithium prices explain the M&A behavior after mid-2016 until early 2017.

Keywords: Lithium industry; lithium prices; M&A; fractional integration; fractional cointegration; wavelets (search for similar items in EconPapers)
JEL-codes: C22 E30 G30 Q02 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:afj:journ3:v:11:y:2021:i:1:p:26-34

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