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This study aims to explore the effect of chief executive officer education on firms’ action timing and acquisition performance in industry merger waves. In addition, this study investigated the moderating influence of CEO duality and firm cash flow on the relationship between education and entry timing.

Following the methodology for determining merger waves in previous studies, the authors identified 16 industry merger waves of Chinese listed firms from 2008 to 2019. Multiple linear regression was employed to examine the hypotheses.

The results showed that higher CEO education was associated with early participation in merger waves. CEO duality negatively moderated the education-entry timing relation. The effect of CEO education on entry timing was more pronounced when firms had higher cash flow. Moreover, more educated CEOs materially enhanced acquisition performance in merger waves.

Entry timing in industry merger waves has important implications, as early movers establish competitive advantages and achieve higher acquisition performance. However, the managerial characteristics determining entry timing have not received adequate attention. Meanwhile, studies examining the effect of CEO education on acquisitions are limited. This study explored the effect of CEO education on firms’ entry timing and acquisition performance in merger waves, thereby contributing to the literature on merger waves and managerial characteristics. This study’s findings regarding the moderators of the education-entry timing relation enrich the literature on corporate governance and agency theory.

Merger waves have typically been viewed through the prism of either corporate strategy or macro-economics. This paper aims to broaden debate about factors that cause – or are associated with – mergers/merger waves over a 120-year period. It ascribes “personalities” to six distinct waves and draws an overarching conclusion about how merger architects are viewed.

Databases and interviews are used to piece together detail about CEOs associated with six distinct and recognized merger-waves during a 120-year focal period. The study establishes and defends, a priori, principles for interrogating data to get a sense of each wave-era’s corporate personality/idiosyncrasy. For each era, two exemplar CEO-profiles are presented and – through inductive-reasoning – held out as representative.

Distinct personalities are associated with six merger waves. Each wave is given a summary anthropomorphic description which conveys a sense that it may be viewed as the non-rationale expression of aggregate and historically distinct CEO behavior within a circumscribed timeframe.

The work’s key limitation – explicitly acknowledged – is that it amassed data/evidence from disparate historical sources. However, the authors have developed and defended principles for addressing this concern.

Improved investment analyses, in particular. The work prefigures formal establishment of a new variable-set impacting share-price prediction.

The paper offers a perspective on how psychological/personality-related variables impact management decision-making, creating something of a bridge between mostly non-overlapping research disciplines.

The paper broadens debate about how and why merger waves occur. It removes the exclusive analysis of merger waves from the hands of economic historians and strategic management theorists.

This paper aims to review the relevant literature on mergers and acquisitions in an attempt to provide a comprehensive account of what we know about mergers and which parts of the puzzle are still incomplete.

This literature review consists of three key sections. The first part of this paper summarises the literature on the cyclical nature of mergers referred to in the literature as merger waves. The second section reviews the causes and consequences of takeovers; it first reviews the causes, or drivers, of acquisitions, while focusing on the fact that acquisitions happen in waves and then reviews the consequences of takeovers, with a predominant focus on the impacts of mergers on the economic performance of acquirers. The third part of the review summarises the theories as well as previous empirical studies on determinants of announcement returns and post-acquisition performance of combined firms.

Merger activity demonstrates a wavy pattern, i.e. mergers are clustered in industries through time. The causes suggested for this fluctuating pattern include industry and economy-level shocks, mis-valuation and managerial herding. Market reaction to announcement of acquisitions is, on average, slightly negative for acquirer stocks and significantly positive for target stocks. The combined abnormal return is positive. These findings have been consistent over several decades of investigation. The prior research also identifies a number of factors that are related to performance of acquisitions. These factors are categorised and reviewed in five different groups: acquirer characteristics, target characteristics, bid characteristics, industry characteristics and macro-environment characteristics.

This review illustrates a number of issues. Prior research is heavily biased towards gains to acquirers and factors that affect these gains. It is also biased towards finding sources of value creation through mergers, despite the fact that several theories suggest that mergers can be value-destroying. In fact, value destruction is often attributed to managers’ self-interest (agency problem) and mistakes (hubris). However, the mechanisms through which mergers destroy value are rarely addressed. Aside from that, the possibility of simultaneous creation and destruction of value in acquisitions is not often considered. Finally, after several decades of investigation, a key question is not completely answered yet: “What are the sources of value in mergers and acquisitions?”

The primary purpose of this paper is to test the prediction that overpricing drives merger waves.

The authors supplement proxies of overpricing from the existing literature such as subsequent under‐performance, the form of consideration/financing and low Book‐to‐Market ratios with an approach based on analysts' earnings forecasts. The authors maintain that over‐pricing is associated with relatively optimistically biased forecasts and use a metric based on subsequent earnings disappointments to represent mispricing.

It is reported that acquirers in hot markets are overpriced relative to acquirers in cold markets on almost all measures of over‐pricing thus supporting the behavioural theory. However, having controlled for optimistically biased expectations the long‐run BHARs to acquisitions in hot markets exceed those of acquisitions made in cold markets. These results therefore support the neoclassical theory's contention that post‐acquisition returns in merger waves are better than the unobserved alternative without the acquisition. The authors infer that neither the neoclassical nor behavioural theory on its own can provide a complete description of merger waves.

The authors exploit earnings forecasts to establish evidence of overpricing in a manner that is novel to the M&A literature. It is found that financing/consideration is significant in explaining subsequent under‐performance only in hot markets. This result is unaffected by controls for mispricing. The authors infer that the use of equity financing is driven by both behavioural timing and also by a desire to share any shortfall due to the increased potential for overpayment in hot markets.

The paper empirically investigates how family firms appropriate acquired resources to become more innovative in the context of merger waves. It draws on resource-based view and the theory of first mover (dis)advantages to examine the implications of the timing of acquisitions on innovation in family firms.

The paper uses a panel data set of Standard & Poor's (S&P) 500 manufacturing firms followed over a period of 31 years.

The study finds empirical support for the predictions that family firms are more able to utilize acquired resources better than nonfamily firms. Furthermore, targets acquired during the upswing of a merger wave are more valuable to family firms and associated with more innovation than for nonfamily firms.

The paper establishes that resources acquired during the upswing of a merger wave are more valuable, provide better resource synergies and impact innovation positively in family firms than nonfamily firms. Second, the paper makes an empirical contribution that family firms absorb external resources markedly differently and more efficiently than nonfamily firms. Third, the paper enhances a better understanding of the influence of family ownership on the relationship between acquisitions and innovation outputs.

To examine whether Japanese commercial banks exhibited economies of scale and economies of density at the time when the mega‐merger wave in Japanese banking began in the late 1990s. Since this merger wave has not yielded efficiencies, this analysis aims to shed light on whether banks, at the start of the wave, had reason to believe that larger banks would be more efficient.

Using a modified version of the translog cost function, the analysis estimates economies of scale and economies of density for Japanese city banks, trust banks, and regional banks. Then, the relationship between size and economies of scale/density and that between profitability and scale/density are explored using regression analysis.

Results suggest that larger banks (as measured by value of assets/loans/ deposits/investments, and number of employees/branches) were more likely to be in the decreasing/constant returns to scale/density region than smaller banks, The finding was statistically significant for all three types of Japanese banks. On average, city banks exhibited diseconomies of scale/density; trust banks exhibited constant returns to scale and increasing returns to density, and regional banks exhibited increasing returns to scale and density. This suggests that unions between city banks and either regional banks or trust banks may have been more likely to yield cost‐efficiencies, and raises questions concerning the efficiency motivations of the mega‐bank mergers. The findings further indicate that banks with higher sales were more likely to have exploited scale/density efficiencies, and that banks with higher net incomes were more likely to be in the increasing returns region.

This paper suggests that the mega‐merger wave in Japan in the late 1990s may not have been motivated by a desire for greater efficiencies through utilization of under‐utilized branch networks. Unlike other studies, this analysis differentiates between economies of scale and economies of density.

American industry is in the midst of a new merger boom. Recent studies, however, show that such mergers do not necessarily enhance profits, boost productivity, aid efficiency, or result in social good. Given these findings, you ought to seriously question whether a proposed merger is a sound strategic decision before acting on it.

This paper aims to review the relevant literature on mergers and acquisitions in an attempt to provide a comprehensive account of what we know about mergers and which parts of the puzzle are still incomplete.

This literature review consists of three key sections. The first part of this paper summarises the literature on the cyclical nature of mergers referred to in the literature as merger waves. The second section reviews the causes and consequences of takeovers; it first reviews the causes, or drivers, of acquisitions, while focusing on the fact that acquisitions happen in waves and then reviews the consequences of takeovers, with a predominant focus on the impacts of mergers on the economic performance of acquirers. The third part of the review summarises the theories, as well as previous empirical studies, on determinants of announcement returns and post-acquisition performance of combined firms.

Merger activity demonstrates a wavy pattern, i.e. mergers are clustered in industries through time. The causes suggested for this fluctuating pattern include industry- and economy-level shocks, mis-valuation and managerial herding. Market reaction to announcement of acquisitions is, on average, slightly negative for acquirer stocks and significantly positive for target stocks. The combined abnormal return is positive. These findings have been consistent over several decades of investigation. Prior research also identifies a number of factors that are related to performance of acquisitions. These factors are categorised and reviewed in five different groups: acquirer characteristics, target characteristics, bid characteristics, industry characteristics and macro-environment characteristics.

This review illustrates a number of issues. Prior research is heavily biased towards gains to acquirers and factors that affect these gains. It is also biased towards finding sources of value creation through mergers despite the fact that several theories suggest that mergers can be value-destroying. In fact, value destruction is often attributed to managers’ self-interest (agency problem) and mistakes (hubris). However, the mechanisms through which mergers destroy value are rarely addressed. Aside from that, the possibility of simultaneous creation and destruction of value in acquisitions is not often considered. Finally, after several decades of investigation, a key question is not completely answered yet: “What are the sources of value in mergers and acquisitions?”

The latest wave of merger mania began in 1984. That year the value of completed takeovers more than doubled that of the previous year to over £5.5 billion. The study looks at the reasons for the boom, the legislation involved, and the benefits of merging.

The purpose of this paper is to determine the effects of the mergers and acquisitions on market prices, consumer welfare and aggregate profit of the merging firms and those of the non-merging firms and, therefore, answer the question on the overall effect of mergers and acquisitions on different performance measures on milk market using data from all the 34 licensed and active milk processors in Kenya.

A new model of analysis as developed from the Canadian Competition Policy maker, i.e. The Canadian Competition Policy merger simulation model, was used.

The study found that mergers and acquisitions lead to increase in market shares of the merging firms. The study also found that mergers and acquisitions have a significant effect on product price in the processed milk market. From the findings, the study concludes that mergers and acquisition not only lead to an increase in market shares of both merging and non-merging processed milk firms but also create market dominance due to reduction in the number of market players in the industry.

The study uses the data for the licensed and active milk processors in the industry. The dormant and the non-licensed processors are excluded. Future studies can use the farm-gate prices as opposed to final consumer prices for the processed milk market.

The study contributes toward providing information on the effect of buyouts on social welfares, prices, market share, profitability and other relevant market equilibrium performance measures in the processed milk market in Kenya.