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Mergers and CEO Power
Journal of Institutional and Theoretical Economics (2009)
  • Felipe Balmaceda, Assoc Prof., Diego Portales University

In this paper I propose a model of mergers in which synergies and CEO power play a crucial role. A merger is modeled as a bargaining game between the acquiring and target board of directors with the gains from a merger divided according to the generalized Nash-bargaining solution. The model's implications are consistent with the available empirical evidence on stock returns, and yield some new untested implications that are mainly related to the relationship between CEO power, cor- porate governance and mergers. Finally, the model sheds light on the relationship between aggregate merger activity, synergies and CEO power. (JEL: G34, D86, L21, D21)

  • CEO Power,
  • Mergers,
  • Synergies
Publication Date
Fall September, 2009
Citation Information
Felipe Balmaceda. "Mergers and CEO Power" Journal of Institutional and Theoretical Economics Vol. 165 Iss. 3 (2009)
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