TY - JOUR
T1 - Merger waves : a model of endogenous mergers
AU - QIU, Larry D.
AU - ZHOU, Wen
N1 - Financial support from the Research Grants Council of Hong Kong (HKUST6428/05H).
PY - 2007/3
Y1 - 2007/3
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=36549040012&partnerID=8YFLogxK
U2 - 10.1111/j.1756-2171.2007.tb00052.x
DO - 10.1111/j.1756-2171.2007.tb00052.x
M3 - Journal Article (refereed)
SN - 0741-6261
VL - 38
SP - 214
EP - 226
JO - RAND Journal of Economics
JF - RAND Journal of Economics
IS - 1
ER -