Takeovers, joint ventures and the acquisition of resources for diversification

Authors
Citation
S. Thompson, Takeovers, joint ventures and the acquisition of resources for diversification, SCOT J POLI, 46(3), 1999, pp. 303-318
Citations number
29
Categorie Soggetti
Economics
Journal title
SCOTTISH JOURNAL OF POLITICAL ECONOMY
ISSN journal
00369292 → ACNP
Volume
46
Issue
3
Year of publication
1999
Pages
303 - 318
Database
ISI
SICI code
0036-9292(199908)46:3<303:TJVATA>2.0.ZU;2-Z
Abstract
This paper explores the influence of acquisition costs on the choice betwee n the takeover and joint venture modes of obtaining the resources required for diversifying expansion. It uses the conditions created by privatisation in the UK utility sector as a natural experiment to examine the determinan ts of mode choice across groups of firms with unusually homogeneous opportu nity sets. The empirical design is able to incorporate acquirer, target and geographical market variables as explanatory factors in mode choice. It is shown that the form of diversifying expansion adopted is highly sensitive to the anticipated costs of using the acquisition process.