A conceptual view of exergy destruction in mergers and acquisitions

Company mergers are complex where several firm-specific and contextual factors interact with each other impacting the outcome of the process. Although many firms merge with or acquire others to increase the value of their firms, have more market power and gain more ability to negotiate with suppliers or customers, most of mergers and acquisitions result in failures. Despite the poor performances, firms continue to merge and acquire. The existing literature on the other hand lacks in providing a robust theory to the issue of poor post-merger performance. This study thus responds to exploring the issue of high failure rates in mergers and acquisitions in an entirely different way. As the first output of a research programme on the conceptual, theoretical and empirical issues in merger and acquisitions research, we conceptualize the loss of performance or exergy in mergers and acquisitions using thermodynamic analysis of the mixing process in physical systems. Three propositions are developed that conceptualize the ideal conditions for mergers in terms of firm size, relatedness between the merging firms and the ambient states. The exergy loss due to merging increases with the increasing levels of strategic or cultural incompatibility between the two firms. When the sizes of two firms differ, it is preferable for the larger firm to have higher knowledge base than the smaller firm. Lastly, the knowledge intensity of the country that the merging takes place as well as the relative knowledge base of the merging firms do interact and change the post-merger performance significantly

Book review : energy, complexity and wealth maximization

The book presents a holistic view via the windows of physics and economics to the future of the human race starting from the formation of the universe going through the evolution of the humankind throughout the ages. The author adroitly explains the role of energy as an enabler of evolution, technology and economic growth with an increasing level of complexity throughout the ages. The availability of natural wealth in forms of coal, oil, and natural gas were transformed into useful work incubating technologies and enabling economic growth. Many of the advances in economic growth occurred because of the creative destructions which enabled evolutionary innovations. However, the Earth is no longer in excess of such natural wealth. The mankind should use the knowledge to extract exergy from what is left in terms of natural wealth, solar energy or some other form of energy in the light of thermodynamics that is also neglected for so long in economics and other fields

Is measuring the knowledge creation of universities possible?:a review of university rankings

University ranking indexes are considered very useful benchmarking tools in comparing the performance of universities around the world. Being placed in these prestigious indexes provides a strong advertisement for a university and helps them to attract high-quality students and academicians all over the world. However, there are some important deficiencies of university ranking indexes such as taking into account the whole university as a single unit without differentiating according to different fields of study or research, being limited to some well-known universities, and not considering institutional characteristics such as size or age. This study aims to explore the leading global university rankings to determine the similarities and differences in terms of their ranking criteria, main indicators, modeling choices, and the effects of these on the rankings. Designating the Times Higher Education World Rankings as the base ranking, a comprehensive comparison of the positions of the top universities of the base index with the matched positions of the same universities under other leading indexes including ARWU, QS, Leiden, and URAP is given. Correlations highlight the significant differences among some indexes even in measuring the same criterion such as teaching or research

Who should really get government support:an analysis of Turkish SME cases

Small firms dominate the economy in terms of their share in employment and enterprise totals in most economies. Despite their central role in economic growth and their potential for innovation, the innovation activities these firms undertake are limited or unknown in contrast to many large firms. Most governments across the globe establish frameworks, create funds and revise their taxation and educational policies to stimulate the innovation activities of small firms. This study concerns the relationship between the innovation policies initiated by the Turkish Government to promote innovation among small businesses and the performance of these organisations at the firm level. We investigate the effect of support funds, for the innovativeness of SMEs given by the public agency of the Small and Medium Enterprises Development Organization, on the firms' net sales with respect to size, sector and location. Our results reveal support funds positively contribute to net sales with higher contributions in manufacturing firms relative to the firms from other industrial sectors. Size and location also matter for net sales. Firms that are relatively larger and those located in industrial zones and technology development centres established by the small business development organisation and universities create higher contributions