This study examines the influences of mergers and acquisitions (M&As) on companies' profitability and compares these influences with economic conditions to discuss their significance. It hypothesizes that market power, total assets and synergistic effects are all positively related to profitability, but they are less significant than the economic influences such as economic growth, consumer confidence and producer confidence. Focusing on the largest U.S. mergers and acquisitions during the period from 1998 to 2003, two economic models are designed to test these hypotheses. The first model examines the relationship between M&A influences and profitability. The test results of this model suggest that market power and total assets are both significant to profitability and that synergistic effects are insignificant. The study also finds that increasing market power is 50 times more efficient than increasing total assets in generating profit. The second model examines the relationship between the economic influences and profitability, but the tests results are inconclusive and suggest that economic factors and profitability have non-linear correlations
There has been a persistent earnings gap between male and female workers in the United States over the past decades. This study examines one possible cause for this discrepancy by analyzing its relationship with market power within the manufacturing industry. Theory suggests that firms with market power have more leverage to practice discrimination toward a specific group of workers, resulting in a wage differential. This study finds that market power does not play a statistically significant role in the creation of wage differentials between male and female workers.