Mergers And Efficiency: Changes Across Time focuses on one aspect of
the corporate finance revolution that restructured Corporate America and
led to the longest expansion in U.S. history - changes in rates of
merger efficiency. Demystifying this most controversial and dynamic
period of U.S. economic history is key to understanding the business,
financial and economic innovations that defined the last two decades of
the 20th century. In addition, it is important to create a careful
empirical understanding of the conditions under which merger activity
increased or decreased firm efficiency, industrial productivity, and
overall improvements in aggregate output and economic performance.
The first chapter examines the aggregate data set by modeling the
determinants of the risk of takeover. Next, the author takes a closer
look at possible heterogeneity among targets in takeovers. The second
chapter analyzes the categories previously discussed in the literature,
such as target resistance and management dismissals. Finally, the author
examines what, if any, efficiency improvements were realized after the
takeover. The third and final chapter examines the ex post performance
of combined firms using fixed effects panel data models. These models
have the advantage over the univariate methodologies or regressions used
in earlier studies of being able to control for the prior performance of
the firm.