Mergers of Equals and Unequals
AbstractWe examine the dynamics of post-merger organizational integration. 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. 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 pre-merger operations decreases turnover. This finding is inconsistent with the view that workers of the two firms substitute for each other, creating efficiencies from merger. However, that 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2426.
Length: 35 pages
Date of creation: Nov 2006
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-09 (All new papers)
- NEP-BEC-2006-12-09 (Business Economics)
- NEP-COM-2006-12-09 (Industrial Competition)
- NEP-IND-2006-12-09 (Industrial Organization)
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.:
- Marianne Bertrand & Sendhil Mullainathan, 2003.
"Enjoying the Quiet Life? Corporate Governance and Managerial Preferences,"
Journal of Political Economy,
University of Chicago Press, vol. 111(5), pages 1043-1075, October.
- Bertrand, Marianne & Mullainathan, Sendhil, 2003. "Enjoying the Quiet Life? Corporate Governance and Managerial Preferences," Scholarly Articles 3429713, Harvard University Department of Economics.
- Charles Brown & James L. Medoff, 1987.
"The Impact of Firm Acquisitions on Labor,"
NBER Working Papers
2273, National Bureau of Economic Research, Inc.
- Edward P. Lazear, 1995.
"Culture and Language,"
NBER Working Papers
5249, National Bureau of Economic Research, Inc.
- José Garcia Montalvo & Marta Reynal-Querol, 2004. "Ethnic polarization, potential conflict and civil wars," Economics Working Papers 770, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2005.
- Jos� G. Montalvo & Marta Reynal-Querol, 2005. "Ethnic Polarization, Potential Conflict, and Civil Wars," American Economic Review, American Economic Association, vol. 95(3), pages 796-816, June.
- Mathieu Bunel & Richard Duhautois & Lucie Gonzalez, 2010. "Are Mergers and Acquisitions Accompanied by Increasing Recourse to THS employment? A French perspective," Economics Bulletin, AccessEcon, vol. 30(1), pages 614-623.
- Coralie Perez, 2011.
"Organisational change and job separation in France : endure or escape ?,"
UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers)
- Coralie Perez, 2011. "Organisational change and job separation in France: endure or escape?," Documents de travail du Centre d'Economie de la Sorbonne 11073, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- repec:ebl:ecbull:v:30:y:2010:i:1:p:614-623 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.