I review recent takeover research which advances our understanding of ?who buys who? in the drive for productive efficiency.
This research provides detailed information on text-based definitions of product market links between bidders and targets, the role of the supply chain and industrial networks in driving takeovers, target plant efficiency, and pre- and post-takeover investment in product innovation. Moreover, recent evidence adds to our understanding of ?how firms are sold? (transaction efficiency). Almost half of takeovers involving public targets are initiated by the seller and not by the buyer. Targets are strongly averse to bidder toeholds, and the merger negotiation process strongly protects proprietary
information. Takeover premiums leave traces of rational bidding strategies, including
bid preemption and winner?s curse avoidance. Recent tests employing exogenous
instrumentation of bidder valuations reject that bidder shares are systematically overpriced in all-stock bids, and suggest that bidder synergy gains are much larger than previously thought.
For the last decade economists have been preoccupied with the decline in bank financing to small businesses and entrepreneurs. This effort has produced a better understanding of the obstacles to external financing. We examine the market and ...Read more
‘Crowdfunding’ — raising capital through large numbers of small contributions — is a burgeoning phenomenon, spurred by the internet’s capacity to reduce communication costs. Its still-evolving status is reflected in diversity of contracting...Read more
Brazil is one of the world’s largest emerging markets, with many opportunities for development. Persuading financiers to commit funds to Brazilian firms requires effective corporate and securities laws to facilitate ‘arm’s length’ contracting....Read more