Extensive Income and Value of the Firm: Who Gets What?

Yale ICF Working Paper No. 02-15

23 Pages Posted: 13 May 2002 Last revised: 23 Jun 2009

See all articles by Shyam Sunder

Shyam Sunder

Yale University - School of Management; Yale University - Cowles Foundation

Multiple version iconThere are 2 versions of this paper

Date Written: August 29, 2001

Abstract

In 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.

Keywords: Factor Income Distribution, Extensive Value, Surplus

JEL Classification: D33, L21, M21, M41

Suggested Citation

Sunder, Shyam, Extensive Income and Value of the Firm: Who Gets What? (August 29, 2001). Yale ICF Working Paper No. 02-15. Available at SSRN: https://ssrn.com/abstract=309747 or http://dx.doi.org/10.2139/ssrn.309747

Shyam Sunder (Contact Author)

Yale University - School of Management ( email )

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-6160 (Phone)

HOME PAGE: http://www.som.yale.edu/faculty/sunder/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
980
Abstract Views
5,865
rank
19,930
PlumX Metrics