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Market Competition And Mergers In Professional Service Firms

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  • Yi-Fang Yang
  • Lee-Wen Yang
  • Yahn-Shir Chen

Abstract

This study examines competition level and merger in Taiwanese audit industry over a long time interval of 1992-2008. Total public accounting firms are divided into four sub-samples in terms of market segment, including big, large, medium, and small firms. Next, based on prior studies and service attribute, this study establishes four practice sub-markets: auditing, tax, consultation, and accounting. Empirical results indicate that big firms have the highest competition level but the other three sub-samples show no significant differences in competition level. Next, the auditing, tax, and accounting sub-markets become more concentrated over time but consultation sub-market does not change significantly. Big firms exhibit the highest competition level in the four sub-markets and four sub-markets but achieve the best in three financial performance measures, net profit per partner, profit ratio, and productivity per employee. Post-merger firms financially outperform pre-merger firms for Taiwanese two big firms’ mergers occurred in 1999 and 2003.

Suggested Citation

  • Yi-Fang Yang & Lee-Wen Yang & Yahn-Shir Chen, 2012. "Market Competition And Mergers In Professional Service Firms," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 6(3), pages 103-122.
    • Handle: RePEc:ibf:ijbfre:v:6:y:2012:i:3:p:103-122
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    References listed on IDEAS

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    Cited by:

    1. Min-Ning Lee & Yi-Fang Yang & Lee-Wen Yang & Yahn-Shir Chen, 2017. "Gender Pay Gap And Discrimination In Taiwanese Auditing Industry," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 11(3), pages 1-11.

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    More about this item

    Keywords

    Market Competition; Herfindahl-Hirschman Index; Operating Performance; Public Accounting Firms;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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