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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/14799

Title: Cost Inefficiency, Size of Firms and Takeovers
Authors: Trimbath, Susanne
Frydman, Halina
Frydman, Roman
Keywords: corporate finance and governance
mergers
acquisitions
econometric methods
models with panel data
truncated and censored models
Issue Date: 2001
Publisher: Stern School of Business, New York University
Series/Report no.: SOR-2001-4
Abstract: This study, using the Cox proportional hazards model, finds that the risk of takeover rises with cost inefficiency. It also finds that a firm faces a significantly higher risk of takeover if its cost performance lags behind its industry benchmark. Moreover, these findings appear to be remarkably stable over the nearly two decades spanned by the sample. The effect of the variables used to measure the risk-size relationship, however, indicates temporal changes. Lastly, the study presents evidence from fixed-effects models of ex post cost efficiency improvements that support the hypothesis that takeover targets are selected based on the potential for improvement.
URI: http://hdl.handle.net/2451/14799
Appears in Collections:IOMS: Statistics Working Papers

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