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on Technology and Industrial Dynamics |
| By: | Frey, Rainer; Hussinger, Katrin |
| Abstract: | Technological change is often hypothesized as one of the main drivers of merger activities. This paper analyzes the role of technology in mergers and acquisitions (M&As) at the firm level. Based on a newly created data set that combines financial information and patent data for public firms in Europe as well as country level variables, we apply a structural model to investigate technology-related motivations behind merger formation. Distinguishing between cross-border and domestic M&As, we find that technological relatedness of the M&A partners reduces uncertainty and the expected risk of failure associated with cross-border acquisitions significantly, whereas there is no evidence for technological complementarities driving domestic M&As. The relevance of technology for cross-border M&As further illustrates the international character of technology markets. |
| Keywords: | domestic versus cross-border M&As, technological relatedness, market relatedness |
| JEL: | C25 G34 O32 O34 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5463&r=tid |
| By: | Jordi Brandts; Ayça Ebru Giritligil |
| Abstract: | We study competition in experimental markets in which two incumbents face entry by three other firms. Our treatments vary with respect to three factors: sequential vs. block or simultaneous entry, the cost functions of entrants and the amount of time during which incumbents are protected from entry. Before entry incumbents are able to collude in all cases. When all firms' costs are the same entry always leads consumer surplus and profits to their equilibrium levels. When entrants are more efficient than incumbents, entry leads consumer surplus to equilibrium. However, total profits remain below equilibrium, due to the fact that the inefficient incumbents produce too much and efficient entrants produce too little. Market behavior is satisfactory from the consumers' standpoint, but does not yield adequate signals to other potential entrants. These results are not affected by whether entry is simultaneous or sequential. The length of the incumbency phase does have some subtle effects. |
| Keywords: | Market selection, Imperfect competititon, Entry, Experiments |
| JEL: | C72 D43 D83 L13 |
| Date: | 2006–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:690.07&r=tid |
| By: | Kozo Kiyota; Miho Takizawa |
| Abstract: | This paper examines the pre-exit productivity performance and asks how productivity affects future survival, using firm-level data in Japan for 1995-2002. We found that firms did not face "sudden death" but there was a "shadow of death." Future exiting firms had lower performance four years before their exit. Besides, within a hair 's breadth of death, the unobserved heterogeneity of firm such as management effort played an important role in the firm survival. |
| Keywords: | Pre-exit performance, Productivity, Size, Unobserved heterogeneity, Firm survival |
| JEL: | D21 D24 L25 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d06-204&r=tid |