Firm Financing Scope

In this paper I provide a theory of mergers where merger activity is mainly determined by the quality of internal governance, understood as the level of CEO power, that of external governance, understood as the legal degree of... [ view full abstract ]

In this paper I provide a theory of mergers where merger activity is mainly determined by the quality of internal governance, understood as the level of CEO power, that of external governance, understood as the legal degree of investor protection and the technological interdependence between merging units. The model predicts consistently with the empirical and casual evidence regarding mergers, value creation and financial modes.