The determinants of aggregate-merger activity—Before and after Celler-Kefauver

Regression analysis was used to determine the significant determinants of aggregate merger activity before and after 1950. This study found that stock prices were positively related to merger activity both before and after 1950. However, interest rates were positively related to merger activity prior to 1950, and negatively related to merger activity after 1950. This may have been the result of the Treasury Accord of 1951, which stopped pegging of interest rates. The unemployment rate was negatively related to mergers before 1950, but insignificantly related to mergers after 1950. The decreased significance of the unemployment rate could be the result of the passage of the Celler-Kefauver amendment to the Clayton Act. Tightened regulation may have caused businesses to take a longer run view of merger activity and decreased the business cycle effect. In conclusion, changes in both the regulatory environment and monetary policy have influenced the level of merger activity since 1950.