Premium
Market value, market share, and mergers: Evidence from a panel of U.S. firms
Author(s) -
Entezarkheir Mahdiyeh,
Sen Anindya
Publication year - 2018
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2924
Subject(s) - endogeneity , market share analysis , stock market , market value , panel data , market share , business , shareholder value , shareholder , stock dilution , market value added , enterprise value , value (mathematics) , monetary economics , economics , market microstructure , restricted stock , finance , econometrics , corporate governance , order (exchange) , paleontology , horse , machine learning , computer science , biology
Improving shareholder value has often been cited as a merger determinant. Because mergers create larger firms and less competition, they may increase shareholder value through higher market share and stock‐market value. We investigate merger impacts on firms' stock‐market value and market share. We construct panel data from 4 different data sources on public merging and non‐merging U.S. manufacturing firms for 1980–2003. Instrumental variables and factors such as R&D, patents, and citations control for endogeneity. We find that mergers are positively correlated with stock‐market value and market share.