Quotation Gugler, Klaus, Mueller, Dennis C., Weichselbaumer, Michael, Yurtoglu, Burcin B. 2012. Market optimism and merger waves. Managerial and Decision Economics 33, 159-175.


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Abstract

We argue that stock and bond market booms and merger waves are both driven by increases in optimism in financial markets and discuss two behavioral hypotheses, the managerial discretion and overvaluation hypotheses that claim that merger waves are driven by market optimism. Empirical support for the managerial theory is provided by evidence that the amounts of assets acquired increase as optimism in financial markets increases and that the returns to acquiring companies are inversely related to market optimism at the time of mergers. Our measures of market optimism also explain managerial choices of finance for mergers.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Managerial and Decision Economics
WU-Journal-Rating new FIN-A, INF-A, STRAT-B, VW-D, WH-B
Language English
Title Market optimism and merger waves
Volume 33
Year 2012
Page from 159
Page to 175
Reviewed? Y
URL http://onlinelibrary.wiley.com/doi/10.1002/mde.2542
DOI http://dx.doi.org/10.1002/mde.2542

Associations

People
Gugler, Klaus (Details)
Weichselbaumer, Michael (Details)
External
Mueller, Dennis C. (Universität Wien, Austria)
Yurtoglu, Burcin B.
Organization
Research Institute for Regulatory Economics FI (Details)
Institute for Quantitative Economics IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5370 Industrial economics (Details)
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