Merger waves : a model of endogenous mergers

Larry D. QIU, Wen ZHOU

Research output: Journal PublicationsJournal Article (refereed)peer-review

65 Citations (Scopus)


We develop a model of endogenous mergers to study their dynamic process. Firms choose whether, when, and with whom to merge. Two necessary conditions are identified for mergers to occur: firm heterogeneity and negative demand shocks. We show that mergers are strategic complements and therefore tend to occur in waves. Moreover, some mergers occur for strategic reasons in order to precipitate further mergers.
Original languageEnglish
Pages (from-to)214-226
Number of pages13
JournalRAND Journal of Economics
Issue number1
Publication statusPublished - Mar 2007
Externally publishedYes

Bibliographical note

Financial support from the Research Grants Council of Hong Kong (HKUST6428/05H).


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