Theory Of Mergers Research Articles

The positive impact of corporate mergers on consumer welfare: from the perspective of corporate R and D investment

Enterprise mergers are essential for the development and growth of enterprises, and they are also an important mechanism for the market economy to improve the overall efficiency of the market through the survival of the fittest. Compared to gradually growing a company through internal accumulation, merging with other companies can achieve various goals such as scale expansion, business expansion, and financial optimization faster in a short period. Although business mergers are spontaneous actions of enterprises, the merger of enterprises, especially large enterprises, affects their performance and consumer welfare. To better study the potential impact of corporate mergers, this article combines traditional and modern merger theories to investigate the positive effects of corporate mergers on product prices, corporate innovation, and overall consumer welfare. The impact channels of Chinese-listed company mergers on their R&D expenses are evaluated empirically. Through empirical and theoretical analysis, this article proves that business mergers can improve efficiency, innovation, and consumer benefits by increasing research and development expenditures.

Prevention of Prenatal Stunting at Bhayangkara Hospital Nganjuk

Efforts to prevent stunting are not only carried out at public health centers, but all agencies are expected to actively participate in preventing stunting, especially hospitals which are required to implement national programs regarding stunting. Stunting is a problem of chronic malnutrition caused by a lack of nutritional intake over a long period of time. This causes problems in the future, namely difficulties in achieving optimal physical and cognitive development. Stunted children have a lower Intelligence Quotient (IQ) than the average IQ of normal children (Ministry of Health of the Republic of Indonesia, 2018). Stunting is defined as a condition where the child's nutritional status according to TB/U results in a Z Score = <-2 SD, this indicates a short or very short body condition resulting from growth failure. Stunting in children is also a risk factor for death, problems with low motor development, low language skills, and functional imbalance (Anwar, Khomsan, and Mauludyani, 2014). Children who experience stunting as a result of someone not getting the right amount of nutritional intake over a long period of time (chronic). So that,stunting can actually be prevented with adequate nutritional intake, especially in the first 1000 days of life. This study aims to analyze efforts to prevent stunting during the prenatal period. The method used in this research is path analysis, by combining TRA and TPB theories to obtain 3 variables, namely environment, knowledge and behavior. Based on merger theory of behavior change TRA and TPB research can be concluded that the environment social pregnant women, knowledge about efforts to prevent stunting in pregnant women and the behavior of pregnant women regarding preventing stunting are all influential. This research concludes that stunting can be prevented from influencing factors starting from the prenatal period. Because adequate nutrition and the health of pregnant women greatly influence the growth of the fetus in the womb, which if there is a lack of intake can result in stunting.

M&A transactions in the Russian market: The impact of corporate boards’ attributes

The paper delves into the impact of corporate boards’ attributes on the efficiency of mergers and acquisitions (M&A) transactions in the Russian market and formulates recommendations on improving corporate governance practices in Russia. The article bridges a gap in research on boards of directors whose characteristics serve as strong signals to the capital market about the quality of corporate governance and protection of investors’ interests. Methodologically, the study rests on agency theory and the theories of mergers and acquisitions. The research hypotheses about the effect of board characteristics on M&A transactions were tested using the least square method to construct a linear regression. The transaction efficiency was assessed using the cumulative abnormal return (CAR) model. The empirical data were retrieved from Annual Reports and ZEPHYR Bureau van Dijk and covered 55,436 mergers and acquisitions from 2000 to 2020, of which 659 transactions satisfied the strict criteria and were selected for further analysis. We found a statistically significant relationship between the board characteristics of the acquiring company and the efficiency of mergers and acquisitions. The obtained results contribute to the development of a new research avenue on network-based interaction between boards of the companies participating in transactions and the involvement of boards of other firms.

Upstream oil and gas mergers and acquisitions: Domestic transactions in the U.S

This paper investigates drivers of mergers and acquisitions in the upstream industry by applying an empirical approach based on domestic transactions during last two decades in the U.S. The oil and gas industry, particularly, upstream industry has seen rapid developments in recent years. The discovery of new resources in unconventional oil and gas parallel to the horizontal drilling and fracking technology, the U.S oil and gas market shows changing patterns which is also reflected in investments in the oil and gas industry. Mergers and acquisitions in the upstream industry in the U.S has experienced increasing patterns, especially in domestic levels (post Shale revolution, booms and changing dynamics over last two decades). Our study recognizes that underlying facts of mergers and acquisitions investments in the oil and gas industry can vary from other industries and can be different than traditional economic explanations. The empirical results suggest that industry-specific variables have stronger influence on mergers and acquisitions than economic and political indicators. The drivers can be different based on various transaction forms and deal levels. Our findings provide a comprehensive view, test various theories of mergers and acquisitions and direct to sector-specific stylized facts of the U.S oil and gas market.

Looking into the cradle of the grave: J22564–5910, a potential young post-merger hot subdwarf

Context. We present the discovery of J22564–5910, a new type of hot subdwarf (sdB) which shows evidence of gas present in the system and it has shallow, multi-peaked hydrogen and helium lines which vary in shape over time. All observational evidence points towards J22564–5910 being observed very shortly after the merger phase that formed it. Aims. Using high-resolution, high signal-to-noise spectroscopy, combined with multi-band photometry, Gaia astrometry, and TESS light curves, we aim to interpret these unusual spectral features. Methods. The photometry, spectra, and light curves were all analysed, and their results were combined in order to support our interpretation of the observations: the likely presence of a magnetic field combined with gas features around the sdB. Based on the triple-peaked H lines, the magnetic field strength was estimated and, by using the SHELLSPEC code, qualitative models of gas configurations were fitted to the observations. Results. All observations can either be explained by a magnetic field of ∼650 kG, which enables the formation of a centrifugal magnetosphere, or a non-magnetic hot subdwarf surrounded by a circumstellar gas disc or torus. Both scenarios are not mutually exclusive and both can be explained by a recent merger. Conclusions. J22564–5910 is the first object of its kind. It is a rapidly spinning sdB with gas still present in the system. It is the first post-merger star observed this early after the merger event, and as such it is very valuable system to test merger theories. If the magnetic field can be confirmed, it is not only the first magnetic sdB, but it hosts the strongest magnetic field ever found in a pre-white dwarf object. Thus, it could represent the long sought-after immediate ancestor of strongly magnetic white dwarfs.

獨立當事者參加訴訟의 構造와 審判에 관한 試論

In order to identify fundamental misunderstandings or errors in the three-sided litigation theory on the structure of the independent party intervention litigation and to seek my alternative perspective (interpretation), I overviewed precedents and theories regarding that structure and the issue of the rules of judgment (application mutatis mutandis of the Article 67 of the Civil Procedure Act), and examined the legislative history of the independent party intervention system and the existing theories on the structure of that litigation, and examined the various legal principles accumulated by the three-sided litigation theory, on the issue of the application mutatis mutandis of the Article 67 to that litigation. And then, reviewed and criticized the analytical problems caused by the three-sided litigation theory and presented an interpretation opinion based on the main intervention litigation merger theory. According to this research, the three-sided litigation theory grasps the structure of the independent party intervention litigation as a single litigation among plaintiff, defendant and intervenor, and establishes a circular relationship in which the defendant and the intervenor are assumed as the indispensable co-litigants in the relation to the plaintiff, the plaintiff and the intervenor are assumed as the indispensable co-litigants in the relation to the defendant, and the plaintiff and the defendant are assumed as the indispensable co-litigants in the relation to the intervenor. In that point, the issue of the application of the Article 67 (1) of the Civil Procedure Act regarding the litigation acts of the indispensable co-litigants and paragraph (2) regarding the litigation act of the counter party is not properly explained, and various and irrational opinions are created. However, if we adopt the main intervention litigation merger theory, the plaintiff and the defendant, who are co-defendants in the litigation brought by the independent party intervenor, have the benefit of the united decision for the claims made by the intervenor as the reason for intervention. Therefore, by agenda them as indispensable co-litigation, The Article 67 (1) may be applied to their litigation acts, and Paragraph (2) may be applied to the intervenor’s litigation act, and the Article 67 does not apply mutatis mutandis to the litigation acts between the plaintiff and the defendant, which is the subject of independent party intervention. However, by pointing out that such an interpretation theory may also be contrary to the provisions of the Civil Procedure Act on the independent party intervention, I concluded this study as an experimentative argument, promising further research.

Competitive Harm from Vertical Mergers

The 2020 Vertical Merger Guidelines produced by the antitrust enforcement agencies introduce a nontechnical application of bargaining theory into the assessment of competitive effects from vertical acquisitions. The economics of such bargaining is complex and can produce skepticism among judges, who might regard its mathematics as overly technical, its game theory as excessively theoretical or speculative, or its assumptions as unrealistic. However, we have been there before. The introduction of concentration indexes in the Merger Guidelines was initially met with skepticism but gradually they were accepted as judges became more comfortable with them. The same thing very largely happened again when unilateral effects theories of mergers were introduced in the 1990s. The bargaining theory that drives much of vertical merger analysis today has much in common with the theory of unilateral effects. In any event, the value of a particular model depends not on its verisimilitude but rather on its testability. The theory that relates a concentration index to the risk of competitive harm from horizontal mergers involves as much conjecture as does the bargaining theory that the Nash model for vertical mergers contemplates. The concentration thresholds in the Horizontal Merger Guidelines capture a rough generalization about a large number of collusive or oligopolistic strategies, some of which are not consistent with each other. What they share in common is belief in a link between the number of firms in a market, the increase in concentration that results from the merger, and the extent of higher prices. Double marginalization as a vertical merger defense occurs when two bargaining firms each have market power but are unable to coordinate their output. Each takes a markup without considering the other, and aggregate markups are too high. Both firms as well as their purchasers would be better off if they could coordinate better. In the AT&T/Time-Warner case the defendants argued that after the merger TW would not coordinate with AT&T but would set its prices as if the merger had not occurred. In that case the merger would not have eliminated double marginalization either. The debate over the elimination of double marginalization bundles two themes that Ronald Coase developed in his two most well-known articles, The Nature of the Firm and The Problem of Social Cost. The first argued that the boundaries of a firm are determined by the firm’s continuous search to procure inputs in the most cost effective way. The second argued that two traders in a well-functioning market will achieve the joint-maximizing solution. This dual relationship is too often ignored. Anti-interventionists rely heavily on Coasean arguments that unless high transaction costs get in the way firms will bargain to joint maximizing results. If that is true, then double marginalization will rarely provide a defense to a vertical merger. The law of vertical mergers deals largely with firms that transact with one another routinely, in legally enforceable buy-sell relationships. By contrast, the actors who appear in The Problem of Social Cost do not bargain with each other regularly. In a well functioning vertical market durable double marginalization should be rare.

Digital Property Revisited

In Chapter 5 of my book “Collisions in the Digital Paradigm: Law and Rulemaking in the Internet Age” I discussed what I called the property problem and whether a digital file could amount to property. My main argument against such a proposition was based upon technological realities – digital material was paradigmatically different from earlier items or forms that could amount to property. It was a difficult position to sustain, especially in light of the decision of the New Zealand Supreme Court in Dixon v R. I considered that the property problem was a true collision in the digital paradigm – a collision between accepted theory which had incrementally developed over the years and which had developed defining characteristics for items of property, and the technological realities of digital data. Furthermore, the particular collision in the digital paradigm is that, with so much information being digitised – and important information at that – it may well be that current remedies for breach of confidence, copyright infringement and the like do not provide a sufficient remedy nor deterrent particularly when the behaviour is accompanied by clear instances of dishonesty associated with the appropriation of information which can be converted into something of value. The difficulty is, as was observed in the case of Your Response Limited v Data Team Business Media Limited that the law of unintended consequences may come into play. My view at the time was that the confluence of data on the one hand with information on the other placed the law in an invidious position. Data or electromagnetic impulses scattered across a medium could not be property although the “merger theory” utilised by US Courts seemed to provide a possible solution. I concluded Chapter 5 with the following observation, “The issue of virtual property remains an open question and much depends upon the nature of the terms and conditions that exist between the provider and the customer. It may be that legislation will address this problem in the future, recognising that in a paradigm of continuing disruptive change, changes to perceptions of whether what may fall within the category of intangibles may have value needs to be recognised along with a further recognition that existing remedies under “traditional” fields of law such as intellectual property and breach of confidence may be too limited to accord sufficient protection. The concept of no property in pure information could remain. Information that is not associated with a medium could remain as intangible. But the digital file associated with a medium would have a level of tangibility sufficient to attract the protection of the civil and criminal law.” The cases discussed in this paper seem to provide the pathway that I tentatively identified. Hence the title “Digital Property Revisited”. In the paper I discuss two cases – one, a case about whether or not there can be property in the contents of files on a computer and hard drive including emails. The second case involves a consideration of cryptocurrencies and whether these can be property within the context of a company insolvency. The two cases are interrelated in that they deal with different aspects of digital material and which is presented in a different way. An analytical pathway to determine whether these and other types of digital data may be property is proposed.

Why Calls for Shifting to Brandesian Economic Theory is Flawed: An Evaluation of the U.S. and E.U's Approach to Vertical Mergers and why Consumer Welfare Should be Retained by U.S. Regulators

The tech industry has exploded over the last few decades and progressive are advocating a shift in antitrust review of vertical mergers in the United States. The overall thrust of these positions advocated seek a modified economic theory based on the writings of the late Justice Louis Brandeis (Brandeisian economic theory) to control the vertical expansion of dominant tech firms such as Amazon. On a broad level, this position advocates a shift of US antitrust regulatory review towards the European Union application of antitrust regulation. In my view, this would not increase consumer welfare in the way these populists and Brandesian economists theorize it would. This article provides a review of both US and EU vertical merger theory and Chicago school economic theory while comparing and contrasting US and EU review of certain business practices to conclude Brandesian economics will not achieve the goal advocated and consumers will be worse off. This paper concludes with support for a proposal to modify and strengthen consent decrees following merger review in order to us a scalpel — rather than a sledgehammer — to adapt to the changes in the technological environment. Most importantly, this proposal would actually protect consumers, not competitors in the marketplace.

Overview of middle and east-european market’s mergers and acquisitions in 2012 to 2017 period

As the markets of Middle and East-European countries, after transformation emerge more and more, mergers and acquisitions are becoming increasingly common form of business restructuring and strategic alliance. Increasing frequency of this type of deals pose as a pressure on business people and government officials at all levels to have a basic understanding of reasoning behind such actions and their mechanics. The following article provides a review of relevant sources containing theories of mergers and acquisitions. Its aim is to present highlights of merger and acquisition activity in context of these aforementioned theories on data concerning Middle and East-European countries, in a defined time-frame starting form 2012 to 2017.

Mergers in higher education institutions: a proposal of a novel conceptual model

PurposeThe macroeconomic changes as well as the challenges facing universities nowadays result in the transfer and adaptation of various concepts and organizational methods from enterprises to universities. One of such solutions is mergers. Even though there are a very large number of practical examples of university mergers in the world, at the same time there is a shortage of frameworks that would help manage mergers. The purpose of this paper is to present key areas of focus in HEIs’ consolidation processes and the creation of the conceptual model of the universities’ mergers.Design/methodology/approachIn this paper synthesis, the inductive approach for model development and case study description were used. The analysis and findings were based on the systematic literature review taken out from management and public policy areas. The new public management and public value governance approaches as well as strategic and process theories of mergers were applied. The descriptive approach to management was used as well.FindingsFormulation of a Conceptual Model of Universities’ Mergers and ten principles of effective management of universities’ mergers that cover the entire process, from planning, through implementation, to integration.Research limitations/implicationsThere is a need to verify the proposed inductive model of universities’ mergers through further qualitative and mixed-methods research studies.Practical implicationsThe paper offers a significant opportunity for practical application of the presented content, because it indicates how the know-how from one (business) sector can be valuable for the future of another sector (the over-fragmented sector of higher education).Originality/valueThis study presents the key areas of focus in HEIs’ consolidation processes and proposes a novel Conceptual Model of Universities’ Mergers. It concludes with the principles of effective management of universities’ mergers.

Operational implications of yield uncertainty in mergers and acquisitions

In this paper, we study the implications of yield uncertainty in firms' mergers and acquisitions, which interfaces between economics and production management. Specifically, we explore three sources of merger effects (i.e., the competition effect, the yield uncertainty effect, and the cost synergy effect) in a Cournot oligopolistic market. The yield uncertainty effect refers to a statistical reduction of yield uncertainty for the post-merger firm in a horizontal merger. This yield improvement acts as a competitive advantage to motivate the firms' merger behavior. Regardless of the cost synergy, the post-merger profit of the merging firms would increase, provided that the firms experience a high yield uncertainty. Moreover, we find that the yield uncertainty effect complements the cost synergy effect, and both have opposite impacts on the post-merger outcomes compared to the competition effect. This relationship reveals novel insights into the aggregate merger effects on the firms' performance, total output, and consumer surplus. For example, after considering the yield uncertainty, the cost synergy effect need not be as significant as the conventional merger theory predicts, to realize a higher total output and a lower market price in the post-merger market. Also, the merger benefits are more easily passed on to consumers in this case. Finally, we also explore the social welfare implications of a merger under firms’ yield uncertainty.

Online measuring method of the axial section line in ring forging process

The axial section line of the ring forging is the key parameter to measure whether the ring forging process meets the technical requirements. To ensure the quality of the ring forgings, an online measuring method of the axial section line in ring forging process is proposed in this study. First, the axial section line data of the ring forging is obtained online by laser scanning device. Then, the axial section line data is locally sorted and is screened to eliminate the edge noise. Second, the axial section line data is converted to line grey image data by merger and derivation theory. Finally, the line grey image data is smoothed by bilateral filtering based on information entropy selection factor. Then, the shape of the axial section line is constructed to complete the measurement of the axial section line. The experimental results show that the measurement speed of axial section line meets the requirements and the measurement accuracy of the axial section line meets the requirements.

A Model of Heterogeneous Firm Matches in Cross-Border Mergers & Acquisitions

In contrast to empirical evidence, recent theories of cross-border mergers and acquisitions (M&As) assume perfect knowledge transfers – from high to low productivity firms – between acquirer and target. Using the Melitz (2003) model of heterogeneous firms, we develop a matching model of cross-border M&As which allows for both perfect and imperfect knowledge transfers, where the latter leads to assortative matching on productivity for firms in cross-border M&As. This is in line with stylized facts (because M&As frequently occur between firms of similar productivity) and in contrast to the proximity-concentration trade-off (in which only the most productive firms have a physical presence in foreign markets). Allowing for M&As raises the firm viability cut-off level, average productivity and welfare in our model. The welfare benefits are weaker for more imperfect knowledge transfers.

Considering Non-Price Effects in Merger Control: OECD Background Note

In a competitive market, firms and consumers make decisions based on several aspects of the product involved. While price is a fundamental aspect, it is not the only one: in many markets, innovation, quality, variety or even privacy may play at least some role in the competition between firms. This paper will introduce these characteristics, and the merger theories of harm associated with them. It will also describe some of the practical challenges involved in considering non-price dimensions of competition, namely identifying when they are important, and considering price and non-price effects together. Although the theoretical basis for the non-price effects of mergers is mixed, the consideration of these effects will be unavoidable in at least some cases. Competition authorities will therefore need to conduct a case-by-case, evidence intensive analysis when considering merger effects for markets with competition on non-price dimensions. Risks of introducing subjectivity to the process can be minimized with a focus on concrete evidence and an assessment of the probabilities of impact.

Innovation Spillover and Merger Decisions

Merger activities in innovative industries point to a relation between mergers and innovation. Firms' innovative ideas may spillover to other firms dis-incentivizing innovation activities, and merger may be a way to capture innovation spillover. The merger-innovation nexus has been well studied in the theoretical literature and recently in empirical papers, but empirical evidence on merger and innovation spillover is limited. In this paper, we investigate the impact of innovation spillovers on the likelihood of firms to merge, using a panel data set of mergers among publicly traded U.S. manufacturing firms from 1980 to 2003. In our empirical model, we also control for business cycles and proxies of neoclassical, behavioural and Q theories of mergers. Innovation is measured using R&D investments and citation-weighted patents, and innovation spillover is proxied using the technological proximity of firms. As a source of R\&D spillover (outward spillover), a firm can internalize its spillover effects by acquiring targets that benefit from the spillover. As a receiver of an R&D spillover (inward spillover), a firm may want to merge to control the negative impact of others' innovation on its competitive edge. We find that innovative firms are on average more likely to merge. These findings are robust to using a measure of patent ownership fragmentation as our instrumental variable. Our results also show that within-industry inward R&D spillovers increase mergers, but between-industry inward R&D spillovers do not influence merger decisions significantly. Our main results are robust to alternative measures of spillovers and different estimation methods.

Merger imbalance and returns in international equity markets

ABSTRACTAt the global level, the mispricing theory of mergers by Shleifer and Vishny (2003) may imply that a significant number of targets acquired in a given country is a sign of market-wide undervaluation whereas intense acquisition activity indicates overvaluation. The present study develops a measure of merger imbalance that compares the quantity of targets and acquirers in a local market and tests significance of this variable for country-level asset pricing. The results prove that countries with a high merger imbalance significantly outperform countries with a low merger imbalance. The research is based on data from 46 countries for the years 1999–2015. The outcomes are robust to many considerations, and the findings support the theory of stock market-driven acquisitions.

Newsvendor Mergers

This paper studies a merger between price-setting newsvendors in an oligopolistic market. It is well known that inventory pooling can greatly reduce inventory costs in a centralized distribution system because it helps reduce aggregate demand uncertainty. Although such statistical economies of scale are important benefits of a retail merger, the extant literature models cost savings from a merger only through reduction in a postmerger firm’s marginal cost. In this paper, we develop a model of a retail merger under uncertain demand that distinguishes between cost savings from conventional economies of scale and those from statistical economies of scale, and we show that these two sources of cost savings have substantially different impacts on firms’ decisions in a postmerger market. Contrary to the existing theory of mergers developed under deterministic demand, we find that although inventory pooling enables the postmerger firm to achieve cost savings, it always induces firms to raise their prices, and we find that marginal cost reduction induces firms to lower their prices only when it is substantial—consequently, larger cost synergies can benefit even nonparticipant firms. Finally, even if a merger induces all firms to raise their prices, it can still improve expected consumer welfare by increasing firms’ service levels under uncertain demand. This paper was accepted by Serguei Netessine, operations management.

Merger Imbalance and Returns in International Equity Markets

At the global level, the mispricing theory of mergers by Shleifer and Vishny (2003) may imply that a large number of targets acquired in a given country is a sign of market-wide undervaluation whereas intense acquisition activity indicates overvaluation. The present study has developed a measure for merger imbalance that compares the quantity of targets and acquirers in a local market and tests significance of this variable for country-level asset pricing. The results prove that countries with a high merger imbalance significantly outperform countries with a low merger imbalance. The research was based on data from 46 countries for the years 1999–2015. The outcomes are robust to many considerations, and the findings support the theory of stock market-driven acquisitions.

Is Innovation a Factor in Merger Decisions? Evidence from a Panel of U.S. Firms

The impact of innovation on mergers has been a subject of debate in merger enforcements. Firms may decide to merge because of increasing market share and expanding capacity. However, mergers may also be motivated by innovation since they provide resources for commercialization of innovation and allow for capturing knowledge spillovers. There are myriad studies on the drivers of mergers, but empirical evidence on innovation-induced changes of merger likelihood is limited. In this paper, we construct a panel data set of mergers among publicly traded U.S. manufacturing firms from 1980 to 2003 and investigate the impact of innovation on merger decisions controlling for business cycles and proxies of neoclassical, behavioural and Q theories of mergers. Our measure of innovation is based on the citation-weighted patent stock. We find that innovations are positively and significantly correlated with firms' merger likelihood. Our results on the control variables, such as business cycles, Tobin's q, and market shares, are also consistent with those reported in the literature. We also find that the magnitude of the merger impact of innovation varies across industries. Our main result is robust to alternative measures of innovation and different estimation methods.