The Stock Market’s Valuation of R&D and Market Concentration in Horizontal Mergers

The Stock Market’s Valuation of R&D and Market Concentration in Horizontal Mergers It is well documented that acquirers often pay a large premium to acquire companies in related industries. There are many explanations as to the source of this premium. This study isolates two variables, R&D-intensity and market concentration, and assesses their influence individually and jointly on the deal premium. The results indicate that higher market concentration levels have a negative effect on the deal premium, while higher acquirer R&D-intensity has a positive influence, if the merger could result in a high market concentration level. Furthermore, deal premiums are greater in selected industries and in smaller deal sizes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

The Stock Market’s Valuation of R&D and Market Concentration in Horizontal Mergers

Loading next page...
 
/lp/springer_journal/the-stock-market-s-valuation-of-r-d-and-market-concentration-in-Pbzgyw76bp
Publisher
Springer US
Copyright
Copyright © 2010 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-010-9262-8
Publisher site
See Article on Publisher Site

Abstract

It is well documented that acquirers often pay a large premium to acquire companies in related industries. There are many explanations as to the source of this premium. This study isolates two variables, R&D-intensity and market concentration, and assesses their influence individually and jointly on the deal premium. The results indicate that higher market concentration levels have a negative effect on the deal premium, while higher acquirer R&D-intensity has a positive influence, if the merger could result in a high market concentration level. Furthermore, deal premiums are greater in selected industries and in smaller deal sizes.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Sep 22, 2010

References

  • The year in review: Economics at the Antitrust Division, 2005-2006
    Armington, E.; Emch, E.; Heyer, K.
  • New evidence and perspectives on mergers
    Andrade, G.; Mitchell, M.; Stafford, E.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve Freelancer

DeepDyve Pro

Price
FREE
$49/month

$360/year
Save searches from
Google Scholar,
PubMed
Create lists to
organize your research
Export lists, citations
Read DeepDyve articles
Abstract access only
Unlimited access to over
18 million full-text articles
Print
20 pages/month
PDF Discount
20% off