Mergers and Acquisitions Over the Cycle: An Empirical Investigation
Ziran Ding and
Benjamin Hemingway
No 35, Bank of Lithuania Discussion Paper Series from Bank of Lithuania
Abstract:
Using US firm-level data from 1985-2019, this paper investigates how the characteristics of matches between acquirers and targets of mergers and acquisitions (M&A) vary over the business cycle. We document several findings. (1) Acquirers are on average larger, more profitable, and in a stronger financial position than targets. (2) Targets are more innovative than acquirers, and (3) M&A targets during a recession have worse financial health but higher levels of innovation compared to M&A targets in booms. Our empirical evidence suggests that an economy may benefit from an economy may benefit from adjusting its antitrust stance over the business cycle.
Keywords: mergers; M&A; business cycle; R&D; productivity (search for similar items in EconPapers)
JEL-codes: E22 E32 G34 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2024-01-09
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Persistent link: https://EconPapers.repec.org/RePEc:lie:dpaper:35
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