Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/122341
Title: QUANTIFYING M&A'S IMPACT ON BRAND EQUITY: A STRUCTURAL APPROACH
Authors: CHU YANLAI
Keywords: Mergers and acquisitions, Brand equity, Structural modelling, Difference-in-difference method
Issue Date: 30-Sep-2015
Citation: CHU YANLAI (2015-09-30). QUANTIFYING M&A'S IMPACT ON BRAND EQUITY: A STRUCTURAL APPROACH. ScholarBank@NUS Repository.
Abstract: The literature on mergers and acquisitions (M&As) has overlooked the interaction between M&As and consumers. Here, we provide a marketing perspective by investigating how the response of consumers to M&As influences the post-M&A performance of firms involved. We develop a conceptual framework on how M&As affect firm profit through three channels: brand equity, cost synergies, and product portfolio. We use structural model in combination with the difference-in-difference approach to quantify the combined profit effect of these channels. We then decompose the combined effect into the main effects of the three mechanisms, along with their two-way and three-way interactions. This approach is applied to assess Lenovo?s acquisition of IBM?s personal computer division in China. We find that the acquisition raised consumers? valuation of the Lenovo brand and generated significant cost synergies. The brand equity gain contributed the most to increasing Lenovo?s profit, followed by cost synergies and product portfolio gains.
URI: http://scholarbank.nus.edu.sg/handle/10635/122341
Appears in Collections:Ph.D Theses (Open)

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