The long-term impact of mergers and the emergence of a merger wave in pre-World-War I Germany

Research output: Contribution to journalArticle

13 Citations (Scopus)


Using annual data on mergers for 35 leading German companies from 1870 to 1913, my study tries to explain the first merger wave that emerged 1898. My panel probit model that accounted for economies of scale, macroeconomic conditions, success of former mergers, and market structure revealed that previous mergers made subsequent mergers more likely. The propensity to merge was higher for larger companies that increased their market power. In the banking industry, managers imitated mergers, although these mergers were not successful, and hence followed the minimax regret principle. Rational information-based herding caused the serial dependency of mergers in other industries.
Original languageEnglish
Pages (from-to)667-688
Number of pages22
JournalExplorations in Economic History
Issue number4
Early online date26 Sep 2005
Publication statusPublished - Oct 2006



  • merger
  • Pre-World War I
  • merger wave
  • Minimax regret
  • Herd behavior

Cite this