The Importance of Industry Links in Merger Waves
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 thr...
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| Veröffentlicht in: | The Journal of finance (New York) 2014-04, Vol.69 (2), p.527-576 |
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| container_end_page | 576 |
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| container_issue | 2 |
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| container_title | The Journal of finance (New York) |
| container_volume | 69 |
| creator | AHERN, KENNETH R. HARFORD, JARRAD |
| description | 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. |
| doi_str_mv | 10.1111/jofi.12122 |
| format | Article |
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| ispartof | The Journal of finance (New York), 2014-04, Vol.69 (2), p.527-576 |
| issn | 0022-1082 1540-6261 |
| language | eng |
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| source | Jstor Complete Legacy; Wiley Online Library Journals Frontfile Complete |
| subjects | Acquisitions & mergers Economic analysis Economic models Financial analysis Financial services industries Hyperlinks Industrial concentration Industrial economics Industrial market Industrial products Industry Mergers Product markets Service industries Social networks Studies Timber industry Topology Trade flows Trade theory |
| title | The Importance of Industry Links in Merger Waves |
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