The amount of merger and acquisition activity is determined largely by the industry development phase.

Question

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During a phase of industry expansion, merger and acquisition activity usually increases. As mature industries slow down and reach saturation, consolidation through mergers and acquisitions may become a strategy for participating firms to remain competitive. Similarly, in declining industries, mergers and acquisitions may be a means of survival for firms facing a decline in demand for their products or services. Therefore, the amount of merger and acquisition activity is largely influenced by the industry development phase.

The Amount of Merger and Acquisition Activity Is Determined Largely