Macroeconomic Drivers for M&A Activity: Evidence from Norway

Abstract

This paper investigates whether certain quantitative macroeconomic factors are drivers for takeover activity in Norway, and if so, what effects these variables have on the number of takeovers. Three macroeconomic variables are studied: domestic stock market performance, domestic short-term interest rate, and gross domestic product. A multiple regression analysis is performed on quarterly data from Norway in the period 2008-2019. The results of the regression suggest that there exists a statistically significant positive relationship between the short-term interest rate and takeover activity. However, no significant relationship is found between M&A activity and the other regressors. A set of robustness regressions are performed, one where quarterly data is altered to yearly data, several where one or two independent variables are omitted, and two regressions where the data is split into two subsamples based on the time period. The robustness tests strengthen the results of the main regression. Acknowledgments