Smeets, Valérie () (Department of Economics, Aarhus School of Business) Ierulli, Kathryn () (Graduate School of Business) Gibbs, Michael () (Graduate School of Business)
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We examine the organizational dynamics of integration post merger. Our basic question is whether
there is evidence of conflict between employees from the two merging firms. Such conflict can arise
for several reasons, including firm-specific human capital, corporate culture, power, or favoritism.
We examine this issue using a sample of Danish mergers. The results are consistent with the basic
hypothesis. Controlling for other effects, employees from the acquirer fare better than employees
from the acquired firm, suggesting that they have greater power in the newly merged hierarchy. As
a separate effect, the more that either firm dominates the other in terms of number of employees,
the better do its employees fare compared to employees from the other firm. This suggests that majority
/ minority status is also important to assimilation of workers, much as in ethnic conflicts. Finally,
greater overlap of operations decreases turnover. This finding is inconsistent with the view
that workers of the two firms may be better substitutes for each other. However, the result and our
other findings are consistent with the view that more similar workers (in terms of either firm- or
industry-specific human capital) are easier to integrate post merger
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Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number
06-8.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Charles Brown & James L. Medoff, 1988.
"The Impact of Firm Acquisitions on Labor,"
NBER Chapters,
in: Corporate Takeovers: Causes and Consequences, pages 9-32
National Bureau of Economic Research, Inc.
[Downloadable!]
Andrei Shleifer & Lawrence H. Summers, 1988.
"Breach of Trust in Hostile Takeovers,"
NBER Chapters,
in: Corporate Takeovers: Causes and Consequences, pages 33-68
National Bureau of Economic Research, Inc.
[Downloadable!]
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