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Do Wages Rise or Fall Following Merger?


  • Martin J. Conyon
  • Sourafel Girma
  • Steve Thompson
  • Peter W. Wright


This paper provides a systematic empirical analysis of the effects of merger and acquisition activity on profitability and firm-level employee remuneration in the UK, using a specially constructed database for the period 1979-91. It finds that both profitability and wages rise following acquisition, and firms that merge within the same industry division experience larger increases in profitability and pay their workers higher wages than those engaged in unrelated acquisitions; i.e. in part, the result of an increase in the efficiency with which labour is used following related acquisition. Copyright 2004 Blackwell Publishing Ltd.

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  • Martin J. Conyon & Sourafel Girma & Steve Thompson & Peter W. Wright, 2004. "Do Wages Rise or Fall Following Merger?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(5), pages 847-862, December.
  • Handle: RePEc:bla:obuest:v:66:y:2004:i:5:p:847-862

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    Cited by:

    1. Donald S. Siegel & Kenneth L. Simons, 2006. "Assessing the Effects of Mergers and Acquisitions on Firm Performance, Plant Productivity, and Workers: New Evidence from Matched Employer-Employee Data," Rensselaer Working Papers in Economics 0601, Rensselaer Polytechnic Institute, Department of Economics.
    2. Heyman, Fredrik & Sjöholm, Fredrik & Gustavsson Tingvall, Patrik, 2006. "Acquisitions, Multinationals, and Wage Dispersion," EIJS Working Paper Series 222, Stockholm School of Economics, The European Institute of Japanese Studies.
    3. John P. Weche Geluebcke, 2012. "Foreign and Domestic Takeovers in Germany: First Comparative Evidence on the Post-acquisition Target Performance using new Data," Working Paper Series in Economics 249, University of Lüneburg, Institute of Economics.
    4. Hans K. Hvide & Eirik Gaard Kristiansen, 2012. "Management of Knowledge Workers," Journal of Law and Economics, University of Chicago Press, vol. 55(4), pages 815-838.
    5. Ragnhild Balsvik & Stefanie A. Haller, 2010. "Picking "Lemons" or Picking "Cherries"? Domestic and Foreign Acquisitions in Norwegian Manufacturing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(2), pages 361-387, June.
    6. John Marsh & Donald S. Siegel & Kenneth L. Simons, 2007. "Assessing the Effects of Ownership Change on Women and Minority Employees: Evidence from Matched Employer-Employee Data," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 14(2), pages 161-178.
    7. Kevin Amess & Mike Wright, 2012. "Leveraged buyouts, private equity and jobs," Small Business Economics, Springer, vol. 38(4), pages 419-430, May.
    8. Oldford, Erin & Otchere, Isaac, 2016. "Are cross-border acquisitions enemy of labor? An examination of employment and productivity effects," Pacific-Basin Finance Journal, Elsevier, vol. 40(PB), pages 438-455.
    9. Yama Temouri & Nigel L. Driffield & Dolores Añón Higón, 2008. "Analysis of Productivity Differences among Foreign and Domestic Firms: Evidence from Germany," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(1), pages 32-54, April.

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