Takeover Activity in Australia: Endogenous and Exogenous Influences

20 Pages Posted: 26 Nov 2005

See all articles by Frank Finn

Frank Finn

University of Queensland - Business School

Allan Hodgson

University of Queensland - Faculty of Business, Economics and Law; Financial Research Network (FIRN)

Abstract

The present paper analyses the population of takeover bids for listed Australian companies using quarterly data over a 25-year period to re-examine the predictability of takeover activity and to determine if there is a flow on impact on macroeconomic variables. We examine whether takeover activity: (i) is endogenous; that is, determined by own activity; (ii) is jointly determined by macroeconomic and capital market variables; and (iii) has an exogenous spillover impact across the economy. We find that stock prices and takeover activity share a long-term common trend, the relative success of takeover bids is independent of sharemarket activity, and conclude that aggregate takeover activity is driven by fundamental economic factors rather than by speculative activity.

Suggested Citation

Finn, Frank and Hodgson, Allan C., Takeover Activity in Australia: Endogenous and Exogenous Influences. Accounting and Finance, Vol. 45, No. 3, pp. 375-394, November 2005, Available at SSRN: https://ssrn.com/abstract=856445 or http://dx.doi.org/10.1111/j.1467-629x.2004.00125.x

Frank Finn (Contact Author)

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Allan C. Hodgson

University of Queensland - Faculty of Business, Economics and Law ( email )

4072 Brisbane, Queensland
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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