Merger waves: A model of endogenous mergers
نویسندگان
چکیده
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 identi ed for mergers to occur: rm 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. Keywords: endogenous mergers, strategic mergers, merger waves, rm heterogeneity, demand shocks JEL Code: L13, L41, D43
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