Marco Testoni

Assistant Professor   |   Department of Management, Tilburg School of Economics and Management

Warandelaan 2, 5037 AB Tilburg, The Netherlands   |   +31 134663849

Google Scholar page    |   LinkedIn

Working papers

Testoni, M. – The Spatial Scope of Competition in the Market for Corporate Control: Evidence from Transportation Networks Data

Job market paper

What conditions can limit competition in strategic factor markets? In this paper, I investigate whether the spatial distribution of companies can introduce frictions to perfect competition in the market for corporate control, and affect the acquirers' ability to appropriate value from mergers and acquisitions (M&As). I argue that competition to acquire a firm is limited to a circumscribed geographical area surrounding the target, and the faster the information flow from the target decays with distance, the smaller will be this geographical area. This framework suggests that proximity allows acquirers to appropriate more value from M&As by allowing them to tap into less competitive segments of the market, in which competition is more spatially bounded. Using the introduction or removal of airline routes in the U.S. during the period 1979–2016 as a source of variation in proximity between cities, I provide results that are consistent with the theoretical predictions: a reduction in the transportation time between the acquirer's city and the target's city increases the probability of an acquisition bid, reduces the chances of observing a competing acquisition offer, reduces the average target's returns and acquisition premium, and increases the average acquirer's returns. Moreover, the target's returns are lower, and the acquirer's returns higher, the more isolated the target's city is from other cities.

Work in Progress

Mobility and Innovation: Evidence from Transportation Networks and Trade Secrecy (with Andrea Contigiani)

Data collection stage

Testoni, M., Sakakibara, M., & Chen, K. – Can Managers’ Due Diligence Efforts Increase the Value of Mergers and Acquisitions? Evidence from Cellphone Tracking Data

Finalist for the Best Corporate Strategy Interest Group Proposal Award at the 2018 SMS Annual Conference (Paris, 09/2018)

Nominated for the Best Conference Paper Prize at the 2018 SMS Annual Conference

Presented at the 2018 AOM Annual Meeting (Chicago, 08/2018)

We investigate the determinants of managers’ due diligence efforts and their effects on the outcomes of mergers and acquisitions. Managers’ investment in due diligence activities should be greater when they face higher information asymmetry and perceived benefits exceed costs. Putting efforts in due diligence should also enhance the value of acquisitions. We proxy acquirers’ due diligence efforts with the total time their employees spend at the targets by utilizing cellphone tracking data. We find that the intensity of inter-company visits is greater when the targets are in industries unrelated to the acquirers and declines as the transportation time between the acquirers and the targets increases. Moreover, the stock market reacts positively to the acquirers at acquisition announcements when the intensity of inter-company visits is higher.

Testoni, M. – The Market Value Spillovers of Technological Acquisitions: Disentangling Rivalry and Technological Signaling Effects

R&R at Strategic Management Journal

Winner of the Best Corporate Strategy Interest Group Proposal Award at the 2018 SMS Annual Conference (Paris, 09/2018)

Nominated for the Best Conference Paper Prize at the 2018 SMS Annual Conference

Previous studies indicate that rivals of two merging firms experience positive stock market reactions at the merger announcement. The general interpretation of this phenomenon is that the acquisition reveals to the stock market new information about opportunities available to all industry participants, while there is no evidence that rivals could be damaged by the creation of a more efficient competitor. In this paper I show that the net spillover effect of a merger on an outsider can be empirically decomposed into a positive opportunity signaling effect and a negative market stealing effect. The first element is a function of the similarity between the outsider’s technological resources and those of the acquired firm, while the second depends on the proximity between the two firms’ product markets.

Testoni, M. – Sell or Partner? Travel Time, Asymmetric Information, and the Seller’s Dilemma in Mergers and Acquisitions

Presented at the 2018 AOM Annual Meeting (Chicago, 08/2018)

When a company is acquired, the seller can choose to retain partial ownership of the merged company by accepting payment in stock. This paper shows that this choice is influenced by the seller’s ex ante ability to assess the acquirer’s value and ex post cost of performing governance activities. Proxying for the seller’s information asymmetry with the time required to travel between the merging companies’ headquarters, I find that the percentage of stock included in the payment falls with travel time, an effect that is stronger when the seller has more bargaining power. Moreover, greater travel time increases the likelihood that the seller accepts an overvalued stock offer and reduces the chances that the target’s CEO sits on the acquirer’s board after the acquisition.


Wilson, K. & Testoni, M. (2014). Improving the Role of Equity Crowdfunding in Europe’s Capital Markets. Bruegel Policy Contribution, Issue 2014/09, pp. 1–14.

Policy paper (90 citations on Google Scholar)

Testoni, M., Breschi, S., & Valentini, G. (2015). Assessing the Effects of the Network of Strategic Alliances on M&A Decisions: Some Empirical Evidence from the US Semiconductor Industry. The Routledge Companion to Mergers and Acquisitions, London: Routledge, pp. 95–113.

Book chapter