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Journal of Economic Perspectives: Vol. 15 No. 2 (Spring 2001)
JEP Volume. 15, Issue 2 | 
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New Evidence and Perspectives on Mergers
Article Citation
Andrade, Gregor,
Mark Mitchell, and
Erik Stafford. 2001. "New Evidence and Perspectives on Mergers."
Journal of Economic Perspectives,
15(2): 103-120.
DOI: 10.1257/jep.15.2.103
DOI: 10.1257/jep.15.2.103
Abstract
As in previous decades, merger activity clusters by industry during the 1990s. One particular kind of industry shock, deregulation, becomes a dominant factor, accountings for nearly half of the merger activity since the late 1980s. In contrast to the 1980s, mergers in the 1990s are mostly stock swaps, and hostile takeovers virtually disappear. Over our 1973 to 1998 sample period, the announcement-period stock market response to mergers is positive for the combined merging parties, suggesting that mergers create value on behalf of shareholders. Consistent with that, we find evidence of improved operating performance following mergers, relative to industry peers.
Article Full-Text Access
Full-text Article (Complimentary)
Authors
Andrade, Gregor (Harvard U)
Mitchell, Mark (Harvard U)
Stafford, Erik (Harvard U)
Mitchell, Mark (Harvard U)
Stafford, Erik (Harvard U)
JEL Classifications
G34: Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
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