An Open Source Update of the Buy-to-Build Indicator

In a past life I had access to expensive databases of corporate statistics, which I used to calculate the buy-to-build indicator for the United States from the 1880s until 2012. In short, the buy-to-build indicator shows how much corporations are spending on buying other corporations (that is, on mergers and acquisitions) relative to how much they are spending on new productive capacity (fixed capital formation). It gives an indication of whether corporations prefer to expand by buying or by building.

As I no longer have access to those expensive databases, I thought I should update the buy-to-build indicator using an open source. Fortunately, the Institute for Mergers, Acquisitions, and Alliances (IMAA) produces data on expenditure on mergers and acquisitions using those same expensive databases and makes them freely available. I have therefore used them to update my estimates to 2017.