This paper distinguishes between value creation through redistribution of physical assets and that from intangible assets. We decompose the market-to-book ratio into fundamental value and unexplained components and find that mergers create wealth when high-value firms primarily acquire physical...

The concept that accounting represents the economics of the firm is a premise for the allocation of scarce resources. In recent years, firm intangible assets seem to have become an increasingly important driver of firm economic value, and yet they are difficult to measure. This study conducts an...