Common wave behavior for mergers and acquisitions in OECD countries? a unique analysis using new Markov switching panel model approach

Shyh-Wei Chen (), Mei-Rong Lin () and Chung-Hua Shen ()
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Shyh-Wei Chen: Department of Finance, Da-Yeh University
Mei-Rong Lin: Department of Money and Banking, National Chengchi University
Chung-Hua Shen: Department and Graduate Institute of Finance, National Taiwan University

Economics Bulletin, 2008, vol. 7, issue 8, 1-12

Abstract: This paper investigates whether or not there is co-waved merger and acquisition (M&A) activity in 26 OECD countries. We apply the Markov Switching model to panel data (MSP hereafter), an approach which has not previously been attempted. Two distinct regimes are recognized in emerge from M&A data: the wave merger regime and normal merger regime. Our MSP captures the co-wave pattern of the sample countries and has a much better fit than either the univariate Markov Switching model or the conventional linear panel model.

JEL-codes: G3 (search for similar items in EconPapers)
Date: 2008-04-21
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Citations: View citations in EconPapers (2)

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