The Study of M&A Market without Government Regulation

In this research, the author sets up a goal to find how the market of M&A can affect some of the macroeconomic parameters. There are two hypotheses which have been tested. The first hypothesis is that inflation can be partially explained by M&A waves or the number of M&A deals. The second hypothesis is that the increasing number of M&A deals affects negatively the number of firms. The analysis of those hypotheses was done with VAR and ARMAX models respectively. The results suggest that we cannot reject the null hypothesis that states that the effect of M&A deals or waves on CPI (consumer price index, inflation) equals zero. However, there is strong evidence of the negative effect: the changes in M&A deals influence the changes of medium-sized firms. Also, one of the findings of this research is that the proportion of employees who work in the large-sized firms, and proportion of the large-sized firms of total values is increasing and according to ARMA modeling will continue to increase.