Value of the Firm: Who Gets the Goodies?
AbstractIn the neoclassical model of the firm, value surplus of the firm is assumed to accrue to its owner. Contract model suggests a distribution of the surplus among various agents depending on the imperfections of the markets in which they transact with the firm. If the share of the surplus to an agent declines with the perfection of the market in which he transacts, shareholders should be expected to get only a small piece of the pie, violating the neoclassical assumption. The paper explores an extensive value concept and its measurement for firms. It also examines the implications of extensive value for what we do and do not know about the consequences of corporate mergers and acquisitions.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm283.
Date of creation: 13 May 2002
Date of revision:
Factor Income Distribution; Extensive Value; Surplus;
Find related papers by JEL classification:
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
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