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This research study integrates management and finance theories to develop hypotheses on the role of business expectations as a predictor of Merger and Acquisition (M&A) activity. Three constituencies of business expectations are identified and analysed: analyst expectations, management expectations and media expectations. The focus of this paper is merger and acquisition activity in the US and in the UK for the period 1984-2009. Time series analysis and panel data analysis are performed. For both the selected countries, the time series analysis finds that changes in analyst expectation and management expectation do predict and therefore can be assumed drive M&A activity but that the predictive power weakens after one quarter.
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