Identification of Greek Takeover Targets and Coherent Policy Implications

Athanasios Tsagkanos, Antonios Georgopoulos, Costas Siriopoulos () and Evangelos Koumanakos

Review of Development Economics, 2008, vol. 12, issue 1, 180-192

Abstract: The main purpose of this paper is the identification of the characteristics of takeover targets in a small open economy like Greece, using the market for corporate control (MCC) hypothesis as theoretical background. Contrary to this hypothesis, the results indicate that the motives for merging or acquisition activities are basically of strategic character. Using a sample of 35 acquired and 105 non‐acquired firms, the sampling process was initially performed by a modified methodology of state‐based sampling, even if its nature cannot be recognized by the classical maximum likelihood estimator (MLE) of logit model. Subsequently, taking into account the small size of the sample, we develop and use, in the logit context, the bootstrap MLE as an advanced alternative method for reducing inherit bias and inefficiency. The findings remain uniform supporting the strategic motives explanation in actual takeover activities, a fact that clearly illustrates the framework of merger policies followed by the Greek Competition Committee during the period under study.

Date: 2008
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