Mergers as reallocation

Boyan Jovanovic; Peter L. Rousseau

doi:10.1162/rest.90.4.765

Mergers as reallocation

Boyan Jovanovic, Peter L. Rousseau

Research output: Contribution to journal › Article › peer-review

Abstract

We model merger waves as reallocation waves, and argue that mergers spread new technology in a way that is similar to that of the entry and exit of firms. We focus on two periods: 1890-1930, during which electricity and the internal combustion engine spread through the U.S. economy, and 1970-2000-the Information Age. As the model implies, reallocation did rise during both epochs. The model also implies that exits should lead mergers during a transition, but this seems to have happened more emphatically in the electrification epoch.

Original language	English (US)
Pages (from-to)	765-776
Number of pages	12
Journal	Review of Economics and Statistics
Volume	90
Issue number	4
DOIs	https://doi.org/10.1162/rest.90.4.765
State	Published - Nov 2008

ASJC Scopus subject areas

Social Sciences (miscellaneous)
Economics and Econometrics

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Mergers as reallocation

Abstract

ASJC Scopus subject areas

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