Previous U.S. M&A studies have shown that the acquisitions of under-performing firms by well-performing firms generate greater synergies; however this is inconsistent with the well-documented “Cherry Picking” behavior of foreign investors in emerging markets. This paper develops a theory within the “law and finance” framework to explain this puzzle. First, highly profitable firms will self sele...

This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to realize a product innovation. Production capacities of both firms are product specific. It is shown that firms anticipate a future product innovation by under-investing (if the n...

Using Transparency International’s ratings of firm disclosures on anticorruption efforts, we find that disclosures are related to firms’ country and industry exposures to corruption, and to enforcement and monitoring variables. We then examine whether firms’ residual anticorruption disclosures are related to subsequent allegations of corruption and subsequent performance. Firms with abnormally ...

Advances in information technology increasingly allow firms to identify expensive, high-cost customers, who are not only individually less profitable for firms but also raise the average marginal cost incurred by firms and thus impose a negative externality on inexpensive customers. Should competing firms share information that identifies such customers? The answer to this question has importan...

The mining industry is global in the sense that its largest companies come from a number of countries, including developing countries. The global nature of the industry raises the question as to whether such a geographically diverse set of firms make similar strategic choices, and what the consequences of these choices are for both firms and nations. In this study, we examine a sample of the tw...

The paper presents a simple model of oligopoly, in which three firms produce differentiated goods. degree product substitutability is not uniform across Merger profitability from the firms’ perspective investigated. shows that merger depends on good differentiation. Contrary to what seems emerge different models, between supply “more similar” more profitable as compared supplying

We seek to explain why TV advertising is dominated by a few product categories. We apply a model of the TV industry that encompasses both the product markets and the market for TV viewers to discuss who will advertise on TV. Under the assumption that viewers dislike advertising, entailing a contagion effect in advertising, we find that less profitable firms not only will advertise less than hig...

We seek to explain why TV advertising is dominated by a few product categories. We apply a model of the TV industry that encompasses both the product markets and the market for TV viewers to discuss who will advertise on TV. Under the assumption that viewers dislike advertising, entailing a contagion effect in advertising, we find that less profitable firms not only will advertise less than hig...

This paper focuses on oligopolistic markets in which indivisible goods are sold by multiproduct firms to a continuum of homogeneous buyers, with measure normalized to one, who have preferences over bundles of products. Our analysis contributes to the literature on private, delegated agency games with complete information, extending the insights by Chiesa and Denicolò (2009) to multiproduct mark...

Recent research has documented that family-controlled firms are very common around the world. This paper provides new evidence on the accounting and market performance of this type of companies. The empirical investigation is conducted on a market in which family firms are well-established and represent the most widespread form of ownership, namely Switzerland. Using panel data for the period 2...