Are There Waves in Merger Activity after All?

Socioeconomic Institute Working Paper No. 0414

31 Pages Posted: 8 Feb 2006

See all articles by Daniel Halbheer

Daniel Halbheer

HEC Paris - Marketing

Dennis L. Gärtner

University of St. Gallen

Date Written: February 2006

Abstract

This paper investigates the merger wave hypothesis for the US and the UK employing a Markov regime switching model. Using quarterly data covering the last thirty years, for the US, we identify the beginning of a merger wave in the mid 1990s but not the much-discussed 1980s merger wave. We argue that the latter finding can be ascribed to the refined methods of inference offered by the Gibbs sampling approach. As opposed to the US, mergers in the UK exhibit multiple waves, with activity surging in the early 1970s and the late 1980s.

Keywords: Merger Waves, Markov Regime Switching Regression Model, Gibbs Sampling

JEL Classification: G34, C32, C11, C15

Suggested Citation

Halbheer, Daniel and Gärtner, Dennis L., Are There Waves in Merger Activity after All? (February 2006). Socioeconomic Institute Working Paper No. 0414, Available at SSRN: https://ssrn.com/abstract=730505 or http://dx.doi.org/10.2139/ssrn.730505

Daniel Halbheer (Contact Author)

HEC Paris - Marketing ( email )

Paris
France

Dennis L. Gärtner

University of St. Gallen ( email )

Bodanstrasse 6
St Gallen, 9000
Switzerland

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