Economics Paper Index

Capital Markets and Merger Activity

by Bob Burkhardt
14.383

Converted to HTML July 27, 1998.

This is a paper I did as a graduate student in economics at M.I.T. It started out as a paper for a class in American (well parts of North America anyway) economic history with Peter Temin who received it well. I later revised it and used it as my paper for the econometrics class although I threw in at least one statistical investigation that didn't have much to do with econometrics. The econometricians (Frank Fisher and Jerry Hausman) tolerated it.

A significant part of it was written in the public library at Elko, Nevada, while I waited for a train going east. I had accidentally gotten on a train going west in Salt Lake City after visiting people there on my way back from a visit home.

There should be some acknowledgements somewhere, but there aren't. I bounced some ideas off some people in the Sloan School who Peter Temin referred me to and drove a librarian in the Harvard Business School to distraction getting old volumes of business reports out of the basement.

I can't remember what the "s.e.e." abbreviation that appears in all the regressions stands for. Maybe it should be "s.s.e." (sum of squared errors).

A version in PDF format is available.

Contents

Chapter 1: Introduction
Chapter 2: The Theory
Chapter 3: Economies of Scale: S.E.C. Evidence
Chapter 4: Merger Activity and Differential Costs of Capital
Chapter 5: Distribution of Capitalizations and Flotation Costs
References

Tables

Table 3.1: Cost of Flotation: Bonds
Table 3.2: Cost of Flotation: Preferred Stock
Table 3.3: Cost of Flotation: Common Stock
Table 3.4: Cost of Flotation: Unsegregated Types of Securities
Table 5.1: Liabilities of Unincorporated Businesses, 1900
Table 5.2: Distributions of Capitalizations and Flotations Compared

Economics Paper Index