Abstract

The purpose of this paper is to suggest a method to open the internally generate goodwill “black box” and to give an interpretation of its competitive meaning. The study takes a “breaking down” approach that, starting from the goodwill value proceeds through a reduction process that traces the internally generated goodwill to the competitive position of the firm, finding a link between the goodwill value and the competitive phenomena related to it. Through the process of goodwill breakdown the paper contributes to shed light on the process of goodwill creation giving a competitive interpretation of its economic meaning. Without deny the relevance of the accounting and financial literature, the paper offers a partially different and new perspective of goodwill analysis focusing on the relationship that internally generated goodwill has with the competitive position of the firm.

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