Loderer, Claudio; Wälchli, Urs (25 January 2013). The end of the corporate life cycle (Unpublished). In: Association Francaise de Finance (AFFI) Meetings. Lyon. 28.-31. Mai 2013.
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This paper asks how takeover and failure hazards change
as listed firms get older. The hypothesis is that they
increase because firms gradually run out of growth
opportunities. We find the opposite. Both takeover and
failure hazard drop significantly with age. The decline in
takeover hazard can be explained with Loderer, Stulz, and
Waelchli’s (2013) “buggy whip makers” hypothesis:
Because old firms are comparatively well-managed and
are affected by limited agency problems, on average, they
offer little value added potential to acquirers. Failure
hazard drops because to learning. The results are robust
to various alternative interpretations and cannot be
explained by unobserved heterogeneity. While hazards
decline with age, they do not go to zero. This explains
why, eventually, all listed firms disappear
Item Type: |
Conference or Workshop Item (Paper) |
|---|---|
Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Financial Management |
UniBE Contributor: |
Loderer, Claudio, Wälchli, Urs |
Subjects: |
600 Technology > 650 Management & public relations 300 Social sciences, sociology & anthropology > 330 Economics |
Language: |
English |
Submitter: |
Urs Wälchli |
Date Deposited: |
03 Dec 2013 10:16 |
Last Modified: |
05 Dec 2022 14:26 |
Uncontrolled Keywords: |
firm age, industry age, takeovers, financial distress, creative destruction |
BORIS DOI: |
10.7892/boris.38853 |
URI: |
https://boris.unibe.ch/id/eprint/38853 |
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