Growing through the merger and acquisition

Author

Jianhuan XU, Singapore Management UniversityFollow

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