The dynamics of mergers and acquisitions in oligopolistic industries

Jianjun Miao and Dirk Hackbarth

No WP2011-029, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: This paper embeds an oligopolistic industry structure in a real options framework in which synergy gains of horizontal mergers a rise endogenouslya nd vary stochastically over time. We find that(i) mergers are more likely in more concentrated industries; (ii) mergers are more likely inindustries that are more exposed to industry-wide shocks; (iii) returns to merger and rival firms arising from restructuring are higher in more concentrated industries;(iv) increased industry competition delays the timing of mergers; (v) insufficiently concentrated industries, bidder competition induces abid premium that declines with product market competition;and (vi) mergers are more likely and yield larger returns in industries with higher dispersion in firm size.

Keywords: Anticompetitive effect; Industry structure; Real options; Takeovers (search for similar items in EconPapers)
JEL-codes: G13 G31 G34 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2011-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The dynamics of mergers and acquisitions in oligopolistic industries (2012)
Working Paper: The Dynamics of Mergers and Acquisitions in Oligopolistic Industries (2007)
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