Mergers in the food industries: Trends, motives, and policies

John Connor () and Frederick E. Geithman
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Frederick E. Geithman: Department of Agricultural Economics at the University of Wisconsin-Madison, Postal: Department of Agricultural Economics at the University of Wisconsin-Madison

Agribusiness, 1988, vol. 4, issue 4, 331-346

Abstract: From 1978 to 1987 the US food-marketing industries were in the throes of an historic merger wave that greatly eclipsed the previous three merger waves. Neoclassical economics, which assumes profit-maximization is the motive for mergers, and managerial utility are the two competing explanations for merger behavior. Empirical tests have so far been unable verify the neoclassical paradigm, which leaves managerial hubris as the principal explanation for mergers. The stock market crash of October 1987 together with expected tighter state and federal merger regulations will markedly slow mergers by large corporations.

Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:4:y:1988:i:4:p:331-346

DOI: 10.1002/1520-6297(198807)4:4<331::AID-AGR2720040404>3.0.CO;2-Y

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