Title: Determinants of merger activity: evidence from India

Authors: Madhuri Agrawal, Rudra Sensarma

Addresses: Business Optimization Services, i2 Technologies, Mumbai 400096, India. ' Birmingham Business School, Edgbaston Park Road, Birmingham B15 2TT, UK

Abstract: This study investigates the role of industry level factors in determining merger activity in an emerging economy. The study uses information from India, which has witnessed acceleration in merger activity subsequent to recent economic reforms. Departing from the existing literature, we proxy merger activity by the occurrence of mergers and the number of mergers. The results from logistic and count data regressions suggest that growth opportunity, concentration and cash flow are important determinants of merger activity. However, unlike existing studies, no evidence is found to support the role of mergers as a corporate restructuring activity in response to industry shocks.

Keywords: acquisitions; count data regression; emerging economies; frequency; India; logit regression; mergers; occurrence; poisson distribution; financial services management; India; economic reforms; growth opportunity; concentration; cash flow.

DOI: 10.1504/IJFSM.2007.016285

International Journal of Financial Services Management, 2007 Vol.2 No.4, pp.277 - 288

Published online: 15 Dec 2007 *

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