Causes and consequences of merger waves

Joern Kleinert () and Henning Klodt

No 1092, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper presents some ideas about determinants of merger waves and some evidence on their effect on profitability and employment. A brief survey of previous merger waves and an analysis of the recent one give support to the hypothesis that sectoral shocks are at the root of merger waves. Deregulation and globalization are identified as the shocks responsible for the latest wave. The impact of merger activities on profitability and employment growth are studied by using the DOME database which has been built up at the Kiel Institute of World Economics. On average, performance of merging and non-merging firms do not differ significantly. In smal­ler, more homogenous sub-samples, however, substantial sectoral differences are found. The most important determinant of the success of mergers is the size of the target unit.

Keywords: deregulation; globalization; event studies; mergers (search for similar items in EconPapers)
JEL-codes: F23 G34 L22 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1092

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