Publication Type
Journal Article
Version
publishedVersion
Publication Date
7-2017
Abstract
The paper studies with an endogenous growth model how the merger and acquisition (M&A) affects the aggregate growth rate. We model the M&A as a capital reallocation process, which can increase both productivity and growth rates of firms. The model is tractable and greatly consistent with patterns observed in the M&A at the micro level. Matching our model to the data, we find that prohibiting the M&A would lead to the reduction of the aggregate growth rate of US economy by 0.1% and the reduction of the aggregate TFP by 5%.
Keywords
Growth, Merger and acquisition, Knowledge spillover, Matching Complementarity, Capital reallocation
Discipline
Growth and Development | Macroeconomics
Research Areas
Macroeconomics
Publication
Journal of Economic Dynamics and Control
Volume
80
First Page
54
Last Page
74
ISSN
0165-1889
Identifier
10.1016/j.jedc.2017.04.006
Publisher
Elsevier: 24 months
Citation
XU, Jianhuan.
Growing through the merger and acquisition. (2017). Journal of Economic Dynamics and Control. 80, 54-74.
Available at: https://ink.library.smu.edu.sg/soe_research/2205
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jedc.2017.04.006