Detecting of Merger Waves in China’s Capital Market

Abstract

By taking all listed companies’ mergers and acquisitions from 2007–2018 as a sample, this paper uses Harford’s method to detect merger waves in China’s capital market both at the industrial level and at the aggregate economic level. This paper also uses a Markov-switching model and intuitive method to test the robustness of these results. This study has concluded that, during the sample period, there are 1 wave at the aggregate economic level and 16 waves at the industrial level. The intensity of waves varies among industries. In addition, the clustering of industry merger waves in time leads to the occurrence of the aggregate wave to a certain extent.