We've talked quite a bit
in these posts about merger waves. Previous research finds differential results
for firms that merge before, during and after a merger wave in their industry.
Today's post links to new research that finds interesting results
regarding how public and private firms participate in merger waves and
the resulting (and different) outcomes. The article, is
entitled, "Private and Public Merger Waves" and is authored
by Vojislav Maksimovic, Gordon M. Phillips and Liu Yang.
The abstract is below.
Private and Public Merger Waves
Abstract:
We examine the
participation of public and private firms in merger waves and productivity
outcomes. We show that public firms participate more than private firms as
buyers and sellers of assets and their participation is more cyclical. Public
firms are affected more by credit spreads and aggregate market valuation.
Public firm transactions are also impacted positively by their stock market
valuations and liquidity. Public firm acquisitions realize higher gains in
productivity, particularly when their transactions occur on-the-wave and when
their firms' stock is liquid and highly valued. We show that our results are
not just driven by the fact that public firms have better access to capital.
Using productivity data from early in the firm's life, we find that better
private firms subsequently select to become public and that these initial
conditions predict higher participation in asset purchases and sales five and
more years later.
The complete paper can
be downloaded here.
All the best,
Ralph
No comments:
Post a Comment