Abstract

http://ssrn.com/abstract=1625848
 
 

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Private and Public Merger Waves


Vojislav Maksimovic


University of Maryland - Robert H. Smith School of Business

Gordon M. Phillips


University of Southern California; National Bureau of Economic Research (NBER)

Liu Yang


University of Maryland, R. H. Smith School of Business

May 27, 2010


Abstract:     
We examine the participation of public and private firms in merger waves and their outcomes. We show that public firms participate more in mergers and acquisitions than private firms and are more cyclical in their acquisitions. Public firms are also impacted more by macro factors including credit spreads and aggregate merger activities. Plants acquired on-the-wave realize more gain in productivity. We show that our results are not just driven by the fact that public firms have better access to capital. Using productivity data early in the firm's life, we find that better firms select to become public and that we can predict higher participation in productivity-increasing mergers and acquisitions ten and more years later after a firm's initial appearance. Our results suggest that a firm's potential can be identified early and that high potential firms become public in anticipation of accessing capital in the public markets when opportunities arise.

Number of Pages in PDF File: 47

Keywords: Merger Waves, Private Firms, Initial Conditions, TFP

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Date posted: June 18, 2010  

Suggested Citation

Maksimovic, Vojislav and Phillips, Gordon M. and Yang, Liu, Private and Public Merger Waves (May 27, 2010). Available at SSRN: http://ssrn.com/abstract=1625848 or http://dx.doi.org/10.2139/ssrn.1625848

Contact Information

Vojislav Maksimovic
University of Maryland - Robert H. Smith School of Business ( email )
Van Munching Hall
College Park, MD 20742-1815
United States
301-405-2125 (Phone)
301-314-9157 (Fax)
HOME PAGE: http://www.rhsmith.umd.edu/finance/vmax/
Gordon M. Phillips
University of Southern California ( email )
Marshall School of Business
Los Angeles, CA 90089
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Liu A. Yang (Contact Author)
University of Maryland, R. H. Smith School of Business ( email )
4420 Van Munching Hall
R.H.Smith School of Business
College Park, MD 20742
United States
3014055295 (Phone)
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