IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/34920.html

Mergers and Non-contractible Benefits: The Employees' Perspective

Author

Listed:
  • Wei Cai
  • Andrea Prat
  • Jiehang Yu

Abstract

Incomplete contract theory, supported by anecdotal evidence, suggests that when a firm is acquired, workers may be adversely affected in non-contractible aspects of their work experience. This paper empirically investigates this prediction by combining M\&A events from the Refinitiv database and web-scraped Glassdoor review data. We find that: (a) Controlling for pre-trends, mergers lead to lower satisfaction, especially on non-contractible dimensions of the employee experience (about 6% of a standard deviation); (b) The effect is stronger in the target firm than in the acquiring firm; (c) Text analysis of employee comments indicates that the decline in satisfaction is primarily associated with perceived breaches of implicit contracts. Our findings indicate that mergers may reduce workers' job utility through non-monetary channels.

Suggested Citation

  • Wei Cai & Andrea Prat & Jiehang Yu, 2026. "Mergers and Non-contractible Benefits: The Employees' Perspective," NBER Working Papers 34920, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34920
    Note: LS PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w34920.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:34920. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.