Open Access Senior Thesis
Bachelor of Arts
Patrick Van Horn
© 2018 Katherine E Ching
Historically, merger and acquisition (or M&A) activity has occurred in cyclical patterns, forming what are known as “merger waves.” To date, there have been a total of seven waves. Though it is widely acknowledged that merger waves exist, there is no consensus on what drives these waves. Through both qualitative and quantitative analysis, this paper aims to determine the causes of merger waves and looks at those causes through two different lenses: the neoclassical view, which states that economic shocks cause merger waves, and the behavioral view, which states that increases in merger activity are due to managerial behavior and decisions. By analyzing the economic, political, and technological landscapes as well as valuation and interest rate data during periods of intense merger activity, I conclude that neoclassical theories are stronger in explaining the first three waves, whereas behavioral theories are stronger in explaining the last three waves.
Ching, Katherine, "What Drives Merger Waves? A Study of the Seven Historical Merger Waves in the U.S." (2019). Scripps Senior Theses. 1294.