Degree Year

2005

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Economics

Advisor(s)

Kenneth Kuttner
David Cleeton

Keywords

Merger, Japan, M &38, A, United States, Mergers and acquisitions, Economy, Manufacturing

Abstract

Mergers and acquisitions are relatively new phenomena in the Japanese market. The total number M & A transactions per year has increased from approximately 500 to 1,752 between 1995 and 2002. MergerStat records 3,510 and 7,411 transactions in the U.S. for the equivalent years. The percentage of M & A transactions per number of business entities was 0.03% for Japan in 2001 and 0.1% for the U.S. in 2002. As illustrated through the figures, the frequency of M&A in Japan is considerably lower relative to the U.S., but proliferation of transactions is evident as well. Post-merger performances of firms in the progressing Japanese M & A market is an interesting subject to examine. Measuring the short-run performances of the firms should give insights for future transactions. Further, a comparison of the results with the U.S. M & A market may suggest how the Japanese M & A is likely to grow.

The goal of this research is to determine whether short-run post-merger effects following a transaction exist in the recent Japanese M & A market. 60 public manufacturing firms, consisting of merger and business transfer cases in 1995-1999 will be assessed through return on assets and return on equity. Periods examined for pre-merger and post-merger are 1990-1994 and 2000-2004 respectively. The "merger effect" will be examined upon controlling for the pre-merger effect on post-merger effect, the type of transaction, and the frequency of transactions in the time period being examined.

Included in

Economics Commons

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