A Note on Merger and Acquisition Evaluation
Industrial and Corporate Change, 2016, 25, (3), S.447-455, https://doi.org/10.1093/icc/dtv033
This note proposes the continuous treatment approach as a valuable alternative to propensity score matching for evaluating economic effects of merger and acquisitions (M&As). This framework allows considering the variation in treatment intensities explicitly, and it does not call for an arbitrary definition of cutoff values in traded ownership shares to construct a binary treatment indicator. We demonstrate the usefulness of this approach using data from European M&As and by relying on the example of post-M&A employment effects. The empirical exercise reveals some heterogeneities over the whole distribution of acquired ownership shares and across different types of M&As and country groups.
JEL-Codes:C21, G34, L25
Forschungsbereich:Industrieökonomie, Innovation und internationaler Wettbewerb – Strukturwandel und Regionalentwicklung