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Entry-timing, business groups and early-mover advantage within industry merger waves in emerging markets: A study of Indian firms

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Abstract

Merger waves are periods of intense and concentrated merger activity which exhibit a wave-like pattern. Drawing upon the resource-based view, we examine the timing of entry and early-mover advantage within merger waves. Following a robust simulation-based methodology of wave analysis, we identify merger waves in eight industries during the time period 2000–2014. Firms affiliated to business groups were found to be early movers. A higher degree of internationalization is also associated with early movement of a firm. Within business groups, their multi-entity character is positively associated with early entry whereas their board interlock was negatively related with entry-timing. Further, early moving acquirers reap superior post-acquisition performance, thereby suggesting that early-mover advantages exist within merger waves.

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Notes

  1. Consider two BGs: Group X and Group Y. Group X has 10 affiliates whereas Group Y has 5 affiliates. If both these groups have a presence across 10 industries, then group X’s MEC ratio is 1 whereas for group Y it is .5 (Manikandan & Ramachandran, 2015).

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  1. Strategic Management Group, Indian Institute of Management, Lucknow, IIM Road, Prabandh Nagar, Lucknow, 226013, India

    Mohammad Fuad & Ashutosh Kumar Sinha

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  1. Mohammad Fuad
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Fuad, M., Sinha, A.K. Entry-timing, business groups and early-mover advantage within industry merger waves in emerging markets: A study of Indian firms. Asia Pac J Manag 35, 919–942 (2018). https://doi.org/10.1007/s10490-017-9531-2

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