The authors wish to thank an anonymous reviewer of this journal, Robert Faff the Editor, Marc DeCeuster, Neil Fargher, Phil Gray, Russ Lundholm, Terry O'Keffe, Terry Walter and workshop participants at the University of Oregon for their useful comments.
Takeover activity in Australia: endogenous and exogenous influences
Article first published online: 24 JUN 2005
Accounting & Finance
Volume 45, Issue 3, pages 375–394, November 2005
How to Cite
Finn, F. and Hodgson, A. (2005), Takeover activity in Australia: endogenous and exogenous influences. Accounting & Finance, 45: 375–394. doi: 10.1111/j.1467-629x.2004.00125.x
- Issue published online: 24 JUN 2005
- Article first published online: 24 JUN 2005
- Received 9 March 2004; accepted 13 July 2004 by Robert Faff (Editor).
- Takeover activity;
- Macroeconomic factors
The present paper analyses the population of takeover bids for listed Australian companies using quarterly data over a 25-year period to re-examine the predictability of takeover activity and to determine if there is a flow on impact on macroeconomic variables. We examine whether takeover activity: (i) is endogenous; that is, determined by own activity; (ii) is jointly determined by macroeconomic and capital market variables; and (iii) has an exogenous spillover impact across the economy. We find that stock prices and takeover activity share a long-term common trend, the relative success of takeover bids is independent of sharemarket activity, and conclude that aggregate takeover activity is driven by fundamental economic factors rather than by speculative activity.