Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water Sector
This paper examined the cyclical patterns of mergers and acquisitions (M&A) in the global water sector from 1982 to 2024, with a focus on both linear and nonlinear dynamics in M&A waves. Through a univariate analysis using ARFIMA models, we found that the data exhibited stationary behavior,...
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MDPI AG
2025-03-01
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| author | Manuel Monge Rafael Hurtado Juan Infante |
| author_facet | Manuel Monge Rafael Hurtado Juan Infante |
| author_sort | Manuel Monge |
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| description | This paper examined the cyclical patterns of mergers and acquisitions (M&A) in the global water sector from 1982 to 2024, with a focus on both linear and nonlinear dynamics in M&A waves. Through a univariate analysis using ARFIMA models, we found that the data exhibited stationary behavior, meaning that in response to an exogenous shock, the series is likely to revert to its original trend over time. Additionally, the non-parametric Brock, Dechert, and Scheinkman (BDS) test revealed the complex and irregular nature of M&A cycles within the sector. To account for this complexity, we applied the Markov-switching dynamic regression (MS-DR) model, which shows that once the industry enters a high-activity regime, it tends to persist in this state for extended periods. This suggests that external shocks or trends—such as regulatory reforms or global water scarcity concerns—are key drivers that trigger and sustain waves of M&A activity in the sector. |
| format | Article |
| id | doaj-art-75f04f5591ff4b1880d1b30420fda2ea |
| institution | OA Journals |
| issn | 2227-7390 |
| language | English |
| publishDate | 2025-03-01 |
| publisher | MDPI AG |
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| series | Mathematics |
| spelling | doaj-art-75f04f5591ff4b1880d1b30420fda2ea2025-08-20T02:09:17ZengMDPI AGMathematics2227-73902025-03-01137114610.3390/math13071146Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water SectorManuel Monge0Rafael Hurtado1Juan Infante2Faculty of Law, Business and Government, Universidad Francisco de Vitoria, E-28223 Madrid, SpainFaculty of Business, Economics and Law, CUNEF Universidad, E-28040 Madrid, SpainFaculty of Social Science and Law, Universidad Villanueva, E-28034 Madrid, SpainThis paper examined the cyclical patterns of mergers and acquisitions (M&A) in the global water sector from 1982 to 2024, with a focus on both linear and nonlinear dynamics in M&A waves. Through a univariate analysis using ARFIMA models, we found that the data exhibited stationary behavior, meaning that in response to an exogenous shock, the series is likely to revert to its original trend over time. Additionally, the non-parametric Brock, Dechert, and Scheinkman (BDS) test revealed the complex and irregular nature of M&A cycles within the sector. To account for this complexity, we applied the Markov-switching dynamic regression (MS-DR) model, which shows that once the industry enters a high-activity regime, it tends to persist in this state for extended periods. This suggests that external shocks or trends—such as regulatory reforms or global water scarcity concerns—are key drivers that trigger and sustain waves of M&A activity in the sector.https://www.mdpi.com/2227-7390/13/7/1146M&Acompletedwater sectorglobalARFIMA (p,d,q) modelBDS test |
| spellingShingle | Manuel Monge Rafael Hurtado Juan Infante Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water Sector Mathematics M&A completed water sector global ARFIMA (p,d,q) model BDS test |
| title | Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water Sector |
| title_full | Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water Sector |
| title_fullStr | Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water Sector |
| title_full_unstemmed | Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water Sector |
| title_short | Time Series Analysis of the Dynamics of Merger and Acquisition Cycles in the Global Water Sector |
| title_sort | time series analysis of the dynamics of merger and acquisition cycles in the global water sector |
| topic | M&A completed water sector global ARFIMA (p,d,q) model BDS test |
| url | https://www.mdpi.com/2227-7390/13/7/1146 |
| work_keys_str_mv | AT manuelmonge timeseriesanalysisofthedynamicsofmergerandacquisitioncyclesintheglobalwatersector AT rafaelhurtado timeseriesanalysisofthedynamicsofmergerandacquisitioncyclesintheglobalwatersector AT juaninfante timeseriesanalysisofthedynamicsofmergerandacquisitioncyclesintheglobalwatersector |