Economists' Hubris - The Case of Mergers and Acquisitions

Shahin Shojai

Journal of Financial Transformation, 2009, vol. 26, 4-12

Abstract: This paper is the first in a series of articles that look at the practical benefits of economics/finance literature to the world of business and policymakers and critically examines whether there is any relationship between academic thought and business or policy application. In this article I review some key studies of mergers and acquisitions that are representative for this field of study and assess their practical value for making business or policy decisions. I conclude that while this literature does provide a reasonable aggregate of what the markets are doing they form no basis whatsoever upon which judgments are made about acquisitions or mergers and they certainly are of little or no value when it comes to the strategic issues that are essential to the management. Consequently, this academic literature adds very little to our knowledge of how each specific case is to be handled. More specifically, I find very few papers from the world of economics/finance that are actually able to suggest how business combinations can be integrated post-merger, which is what seems to be of greatest value to business managers. This area has largely been left to strategy consultants and a handful of applied (business) economists.

Keywords: Mergers and acquisitions; applied finance; short-comings of academic theory (search for similar items in EconPapers)
JEL-codes: G14 G34 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://ssrn.com/abstract=1418986 Full text (application/pdf)

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:ris:jofitr:0001

Access Statistics for this article

Journal of Financial Transformation is currently edited by Prof. Shahin Shojai

More articles in Journal of Financial Transformation from Capco Institute 77 Water Street, 10th Floor, New York NY 10005.
Bibliographic data for series maintained by Prof. Shahin Shojai ( this e-mail address is bad, please contact ).