weak shareholder rights a product market rationale kj martijn cremers vinay b nair urs peyer first version march 2006 this september is from the international center of finance at yale university wharton school pennsylvania and insead we would like to thank judy chevalier yaniv grinstein gideon saar seminar participants cornell rutgers duke unc harvard chicago gsb northwestern for their comments dasol kim zhenxu tong provided excellent research assistance all errors are our own 1 abstract in markets where customers care about firm survival strong power can have detrimental implications on performance by affecting likelihood that acquired use framework firms choose level after comparing costs takeover vulnerability ie loss with synergistic benefits an acquisition generates two testable it optimal weaker competitive second link between competition stronger industries characterized long term customer relationships using data
