Mergers and acquisitions (M&A) activity has been growing in the restaurant industry over the past three decades. Recognizing that the importance of M&A has increased as a result of this growth, this study used simulation technique to investigate whether restaurant M&A deals occur in waves. Results indicated that the restaurant industry had three M&A waves between 1981 and 2010.;After confirming the existence of restaurant M&A waves, this study then investigated the macroeconomic determinants of the restaurant waves employing two econometric methods: a distributed lag (DL) model and error correction model (ECM). The results of DL estimation showed that cost of debt negatively affected deal frequency in the long term and inflation had a negative lagged effect on deal frequency. On the other hand, current activity and economic outlook had a significantly positive effect on both deal frequency and deal value. The effect of current activity was lagged while that of economic outlook was lagged and long-term. The results of ECM estimation showed that cost of debt had a negative effect on deal frequency in the short and long term while economic outlook had a significantly positive effect on deal frequency in the long term.;This study contributes to the restaurant industry and its scholarship in several ways. Theoretically, this study extends the restaurant literature by proving the existence of restaurant M&A waves and exploring the relationship between macroeconomic conditions and the restaurant waves. It also examines the applicability of the main theoretical frameworks for general M&A waves in all industries to industry-level waves. Practically, this study can help restaurant firms increase synergistic gains from their M&A deals by identifying important economic conditions that restaurant firms should take into account when considering M&A deals. Moreover, restaurant firms can use such conditions to predict an appropriate time for their M&A deals.
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