Vertical Mergers and Firm-Specific Physical Capital: Three Case Studies and Some Evidence on Timing

Avi Weiss

Journal of Industrial Economics, 1994, vol. 42, issue 4, 395-417

Abstract: This paper shows that indirect evidence is often available to assist in understanding the timing of a vertical merger or divestiture. In particular, it is shown that in cases involving firm-specific capital, changes in the residual correlation (after removing market and industry effects) between the firms' stock returns are helpful in explaining the reason for and the timing of the merger/divestiture. The ramifications of this finding are immediate since anything that can pinpoint the reason for a merger, and, moreover, the reason for the timing of a merger, will make merger policy more efficient and productive. Copyright 1994 by Blackwell Publishing Ltd.

Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1821%2819941 ... 0.CO%3B2-E&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jindec:v:42:y:1994:i:4:p:395-417

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-1821

Access Statistics for this article

Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

More articles in Journal of Industrial Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().