Macroeconomic and microeconomic approaches to the analysis of merger waves in the UK

This study attempts to improve our understanding of the nature of mergers and their timing. It is motivated by the inability of empirical evidence at the microlevel to provide strong statistical results for the motivation of mergers in different periods. At the macro-level, the apparently stronger results of some studies have been insufficient to form the basis for a widely accepted theory of merger timing. Although the predictions are closer to the observed procyclical and episodic behaviour of the process, the findings of the macro-literature have been limited, in most cases, to confirmation of what is evident by casual observation. This study purports to create a framework that encompasses both the macro- and micro-environment of a company which may enhance understanding of the dynamic behaviour of merger activity in the UK. At the macro-level, we use frequency domain techniques to empirically examine the existence of merger waves and their relation to economic fundamentals. The empirical approach taken allows the identification of merger waves with different duration, regularity, and power, and reports their relation to macro- and financial factors along these waves. Having identified the explanatory power of macro- and financial factors, as well as the timing pattern of aggregate mergers, we search for complementary driving forces of the process at the micro-level. At the micro-level, a theoretic-decision model is constructed to explain merger timing which incorporates the most prevalent theoretical and empirical explanations, suggested by industrial organization and finance literature, into a dynamic framework. The model exploits the dynamics of the merger process by assuming that motives change over time because of changes in firm-specific characteristics and in merger activity per se. The model stresses the endogenous character of mergers by explicitly incorporating past, current, and future mergers. The theoretical model is estimated, using merger data from the UK from 1990 to 2004. The empirical approach taken is survival analysis. Such an approach explicitly allows for dependency over time, in that it estimates the conditional probability of merger; that is, the probability of merger by time t, given that is has not occurred by time t-1. It is ideally suited to empirically examine the merger timing, since it allows us to investigate whether, given that a firm has survived up to a certain point in time, changes in firm-specific characteristics or changes in merger activity per se will lead to a change in the timing of a merger. Findings of the macro-level provide evidence that fairly regular long waves as well as a less regular, less powerful waves of mergers exist. Even though no two merger waves are identical, they usually have some important features in common. Their coherence with macro- and financial factors varies in strength over waves of different duration and regularity. The findings at the micro-level provide strong evidence of the endogenous character of mergers. A combination of a range of micro-forces is the driving force within a wave which keeps the bandwagon rolling at full speed. As a consequence, macro-factors may pave the way for the development of initial merger activity, while micro-forces fuel merger diffusion and build the dynamics within a wave

The drivers of merger waves

A reduced form hazard rate model of merger timing, estimated using a uniquely constructed 1990–2004 UK panel data set, shows clear correlations between the observed wave-like pattern of merger activity and both exogenous and endogenous drivers with firm characteristics acting as intermediaries

Macroeconomic and microeconomic approaches to the analysis of merger waves in the UK

This study attempts to improve our understanding of the nature of mergers and their timing. It is motivated by the inability of empirical evidence at the microlevel to provide strong statistical results for the motivation of mergers in different periods. At the macro-level, the apparently stronger results of some studies have been insufficient to form the basis for a widely accepted theory of merger timing. Although the predictions are closer to the observed procyclical and episodic behaviour of the process, the findings of the macro-literature have been limited, in most cases, to confirmation of what is evident by casual observation. This study purports to create a framework that encompasses both the macro- and micro-environment of a company which may enhance understanding of the dynamic behaviour of merger activity in the UK. At the macro-level, we use frequency domain techniques to empirically examine the existence of merger waves and their relation to economic fundamentals. The empirical approach taken allows the identification of merger waves with different duration, regularity, and power, and reports their relation to macro- and financial factors along these waves. Having identified the explanatory power of macro- and financial factors, as well as the timing pattern of aggregate mergers, we search for complementary driving forces of the process at the micro-level. At the micro-level, a theoretic-decision model is constructed to explain merger timing which incorporates the most prevalent theoretical and empirical explanations, suggested by industrial organization and finance literature, into a dynamic framework. The model exploits the dynamics of the merger process by assuming that motives change over time because of changes in firm-specific characteristics and in merger activity per se. The model stresses the endogenous character of mergers by explicitly incorporating past, current, and future mergers. The theoretical model is estimated, using merger data from the UK from 1990 to 2004. The empirical approach taken is survival analysis. Such an approach explicitly allows for dependency over time, in that it estimates the conditional probability of merger; that is, the probability of merger by time t, given that is has not occurred by time t-1. It is ideally suited to empirically examine the merger timing, since it allows us to investigate whether, given that a firm has survived up to a certain point in time, changes in firm-specific characteristics or changes in merger activity per se will lead to a change in the timing of a merger. Findings of the macro-level provide evidence that fairly regular long waves as well as a less regular, less powerful waves of mergers exist. Even though no two merger waves are identical, they usually have some important features in common. Their coherence with macro- and financial factors varies in strength over waves of different duration and regularity. The findings at the micro-level provide strong evidence of the endogenous character of mergers. A combination of a range of micro-forces is the driving force within a wave which keeps the bandwagon rolling at full speed. As a consequence, macro-factors may pave the way for the development of initial merger activity, while micro-forces fuel merger diffusion and build the dynamics within a wave.EThOS - Electronic Theses Online ServiceWarwick Business SchoolGBUnited Kingdo

Do Co-opted Boards Affect the Financial Performance of Insurance Firms?

Copyright © The Author(s) 2023. We examine the performance-effects of Chief Executive Officer (CEO) co-opted boards in United Kingdom (UK) property-casualty insurers. We report that board insiders appointed in the aftermath of CEO succession reduce profitability, but bolster solvency. Enhanced solvency also results when the CEO is a financial expert and when proportionately more inside directors are selected by a CEO who is a financial expert. We further find enhanced profitability-effects for insurance experienced co-opted outside directors, while large investors improve solvency. However, the internal or external origin of the CEO does not affect financial outcomes. We consider that our results could have commercial and/or public policy implications

Synthesis and characterization of LNMO cathode materials for lithium-ion batteries

Abstract Synthesis of LiNi0.5Mn1.5O4 (LNMO), a promising cathode material for next generation lithium-ion batteries, was performed via Liquid Phase Self-propagating High-temperature Synthesis (LPSHS) and Aerosol Spray Pyrolysis (ASP) techniques. In the case of the LPSHS technique, the effect of the "fuel" quantity of the precursor solution on the structure, morphology and electrochemical performance of the materials was studied, while in the case of the ASP technique the effect of eight different calcination profiles on the structure, morphology, crystalline phase and electrochemical performance of the material. Structural characterization was performed through XRD, SEM, TEM, BET and Raman spectroscopy, while the electrochemical activity was evaluated via charge/discharge galvanostatic characterization. The results showed that the optimal LPSHS material was obtained for a molar ratio of metal ions/fuel = 3:1 exhibiting stable specific capacity over the cycles even by increasing the C-rate. Τhe optimal ASP material was identified in the case of calcination at 850°C. Both materials had the disordered Fd-3m structure of the LNMO spine

Nuclear inclusions of pathogenic ataxin-1 induce oxidative stress and perturb the protein synthesis machinery

Spinocerebellar ataxia type-1 (SCA1) is caused by an abnormally expanded polyglutamine (polyQ) tract in ataxin-1. These expansions are responsible for protein misfolding and self-assembly into intranuclear inclusion bodies (IIBs) that are somehow linked to neuronal death. However, owing to lack of a suitable cellular model, the downstream consequences of IIB formation are yet to be resolved. Here, we describe a nuclear protein aggregation model of pathogenic human ataxin-1 and characterize IIB effects. Using an inducible Sleeping Beauty transposon system, we overexpressed the ATXN1(Q82) gene in human mesenchymal stem cells that are resistant to the early cytotoxic effects caused by the expression of the mutant protein. We characterized the structure and the protein composition of insoluble polyQ IIBs which gradually occupy the nuclei and are responsible for the generation of reactive oxygen species. In response to their formation, our transcriptome analysis reveals a cerebellum-specific perturbed protein interaction network, primarily affecting protein synthesis. We propose that insoluble polyQ IIBs cause oxidative and nucleolar stress and affect the assembly of the ribosome by capturing or down-regulating essential components. The inducible cell system can be utilized to decipher the cellular consequences of polyQ protein aggregation. Our strategy provides a broadly applicable methodology for studying polyQ diseases

What drives firm profitability? A comparison of the US and EU food processing industry: Discussion Paper 16/12

This article analyzes persistence and the drivers of profitability in US and EU food processing using GMM estimations. Due to different firm size structures first comparable samples of US and EU food processors are derived using Propensity Score Matching. The GMM results indicate that profit persistence in food processing is lower than in other manufacturing sectors. Firm-specific drivers of profitability are size, growth and financial risk. Regarding industry characteristics the growth rate significantly influences profitability. The findings provide insights for the management of food processing firms as well as for policy decisions aiming to counter power imbalances in the food sector