IN THE MARKET FOR FIRMS, HOW SHOULD A FIRM BE SOLD?

Abstract

In the strategic management literature, two mechanisms have been proposed to explain how managers generate economic rents: resource selection, and capability building. Resource selection is a Ricardian perspective where the productivity of resources are heterogeneously distributed among firms (Peteraf, 1993; Wernerfelt, 1984), and managers outsmart the factor markets by selecting resources based on their future values (Barney, 1986). The alternative Schumpeterian perspective is capability building, a mechanism that depends on deployment of resources to affect a desired end (Amit & Shoemaker, 1993; Mahoney, 1995). While capability building requires that managers develop a capacity to manage firm specific tangible and intangible processes, the resource selection mechanism demands managers to accurately assess expectations about the future value of resources.

Citation

Arikan, I. (2004), "IN THE MARKET FOR FIRMS, HOW SHOULD A FIRM BE SOLD?", Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 4), Emerald Group Publishing Limited, Leeds, pp. 181-208. https://doi.org/10.1016/S1479-361X(04)04008-6