The Importance of Industry Links in Merger Waves

• 成果类型: Article
• 署名作者: Ahern, Kenneth R.; Harford, Jarrad
• 署名单位: University of Southern California; University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12122
• 发表日期: 2014
• 页码: 527-576
• 关键词: corporate equity ownership; vertical integration; price-discrimination; horizontal mergers; MARKET; POWER; determinants; acquisitions; incentives

摘要

We represent the economy as a network of industries connected through customer and supplier trade flows. Using this network topology, we find that stronger product market connections lead to a greater incidence of cross-industry mergers. Furthermore, mergers propagate in waves across the network through customer-supplier links. Merger activity transmits to close industries quickly and to distant industries with a delay. Finally, economy-wide merger waves are driven by merger activity in industries that are centrally located in the product market network. Overall, we show that the network of real economic transactions helps to explain the formation and propagation of merger waves.