Fortune Favors the Bold

Costanza Meneghetti, Ryan Williams

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


We investigate whether incentives to join the Fortune 500 affect corporate decisions. Firms closer to the cutoff appear to take actions to join the list by engaging in more mergers and acquisitions activity, bidding for larger targets, and paying higher takeover premia. Further, the relation is stronger for firms with more-entrenched chief executive officers, and the stock market reaction to bids is worse when bidders are close to the Fortune 500's cutoff. A 1994 methodological change by Fortune acts as an exogenous shock for identification. Our results suggest that firms try to increase revenues to join the Fortune 500 but that such actions adversely affect shareholders.

Original languageEnglish (US)
Pages (from-to)895-925
Number of pages31
JournalJournal of Financial and Quantitative Analysis
Issue number3
StatePublished - Jun 1 2017

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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