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Synergistic Competitive Advantage - The Modern Appeal of RBV and IO Theory in the Mergers and Acquisitions

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  • Arup Barua

    (South-Eastern Finland University of Applied Sciences, Finland)

  • Alexandra Ioanid

    (University Politehnica of Bucharest, Romania)

Abstract

The Resource-based View (RBV) and Industrial Organization (IO) theory have successfully clarified the competitive advantage for a single firm based on resources and market aspects but less so for knowing the competitive advantage for dual entities or companies. Therefore, this article attempts to investigate how a competitive advantage emerges in post-M&A. It illustrates that both theories together should contemplate the "synergistic competitive advantage" as a measurement of M&A performance, which explains the competitive advantage by the acquisition synergies, e.g., joint sales, expertise, revenue, and cost. The modern thought will widen the joint appeal of RBV and IO theory considering the SCP model because the synergy (i.e., a combined effect of two entities) should be a competitive, and competitive advantage should be synergistic for acquisition success. Future researchers are entreated to test the synergistic competitive advantage in post-M&A, evading the traditional competitive advantage. Decisively the implications and directions of future research would be illuminated.

Suggested Citation

  • Arup Barua & Alexandra Ioanid, 2021. "Synergistic Competitive Advantage - The Modern Appeal of RBV and IO Theory in the Mergers and Acquisitions," Bulgarian Economic Papers bep-2021-06, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Jul 2021.
    • Handle: RePEc:sko:wpaper:bep-2021-06
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    1. Bayiley, Yitbarek Takele & Redae, Haben Mehari, 2022. "Domestic Bank Merger and Acquisition in Ethiopia: a prudent strategy for efficiency and synergy gain," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 26(01), April.

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    More about this item

    Keywords

    RBV (Resource-based View); IO (Industrial Organization); SCP (Structure; Conduct; Performance); SCA (Synergistic Competitive Advantage); M&As (Mergers and Acquisitions);
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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