Takeover Raiders and The Growth Maximisation Hypothesis

Abstract

It is the purpose of this chapter and the final aim of this study to see if it is possible for an examination of the raider’s role within the takeover phenomenon to shed some light on the appropriateness of Marris’s growth maximisation hypothesis to the theory of the firm. Previously we found that little could be established with regard to the theory of the firm from an analysis of the acquired firms except to establish empirically the valuation constraint in the form envisaged by Marris. This, however, did not provide grounds for choosing this revision of the theory of the firm in preference to either the neo-classical formulation or other posited objectives imputed to managers.

The basis of this chapter was presented at the Warwick Symposium In Industrial Economics, the precedings of which appear in Cowling ed. (1972).