Corporate Aging and Takeover Risk

Loderer, Claudio; Wälchli, Urs (2015). Corporate Aging and Takeover Risk. Review of Finance, 19(6), pp. 2277-2315. Oxford University Press 10.1093/rof/rfu048

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Although growth opportunities fade and profitability declines as firms mature, older firms are no more likely to be acquired than young firms are. This article documents and explains that phenomenon. We argue that, because mature organizations are rationally less flexible, they are more costly to integrate and therefore comparatively unattractive acquisition candidates. The evidence supports this explanation of the negative age dependence of takeover hazard. The evidence also shows that negative exogenous shocks to merger benefits further reduce the takeover hazard of mature firms. We test many alternative explanations and find no evidence that they can explain the hazard decline.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Financial Management

UniBE Contributor:

Loderer, Claudio and Wälchli, Urs

Subjects:

600 Technology > 650 Management & public relations
300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

1572-3097

Publisher:

Oxford University Press

Language:

English

Submitter:

Urs Wälchli

Date Deposited:

02 Dec 2013 10:11

Last Modified:

25 Oct 2019 00:41

Publisher DOI:

10.1093/rof/rfu048

JEL Classification:

G30, L20

BORIS DOI:

10.7892/boris.38754

URI:

https://boris.unibe.ch/id/eprint/38754

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