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Waves and determinants in the activity of Mergers and Acquisitions: The Case of Latin America

Lina M. Cortés (), Diego Agudelo () and Samuel Mongrut ()
Authors registered in the RePEc Author Service: Lina M. Cortés ()

Documentos de Trabajo CIEF from Universidad EAFIT

Abstract: This paper contributes to the current literature of mergers and acquisitions (M&As) by studying the existence of waves and the determinants of M&A activity in the economies of Argentina, Brazil, Chile, Colombia, Mexico and Peru. From a sample of 2,490 M&As announcements reported by Thomson One for these countries, and applying the methodology proposed by Harford (2005), evidence of M&A waves is found for the periods 1993-2002 and 2003-2010 as reported for other regions in various international studies. After controlling for economic and business environment variables, as well as for profitability and book-to-market variables at industry level, we find evidence in favor of the neoclassical theory as a main explanation for M&As, but not for the misvaluation effect. For this purpose, a Prais-Winsten data model with panel corrected standard errors (PCSE) is used, and the results are confirmed through a negative binomial panel data estimation.

Keywords: Mergers and Acquisitions; Latin American Economics; PCSE; Counting Models (search for similar items in EconPapers)
JEL-codes: C23 G34 K21 (search for similar items in EconPapers)
Pages: 29
Date: 2012-12-02
New Economics Papers: this item is included in nep-eff and nep-lam
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