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How general is managerial human capital? : Evidence from the Retention of Managers after M&As

Author

Listed:
  • Kenjiro Hirata

    (Faculty of Economics, Kobe International University)

  • Ayako Suzuki

    (School of International Liberal Studies, Waseda University)

  • Katsuya Takii

    (Osaka School of International Public Policy, Osaka University)

Abstract

This paper investigates the transferability of managerial experience by examining how managers' tenures in target firms influence their probability of retention as board members after mergers or acquisitions in Japanese firms. It develops a general equilibrium model that distinguishes several hypotheses on managerial experiences based on the coefficients of tenure on separation, given several data limitations. In particular, the paper provides a novel method to correct for selection biases by utilizing the timing of selection in a selected sample, which does not require a random sample from the population. Our results suggest that Japanese firms value both target firm-specific and general human capital after M&As and that experience as an employee increases firm-specific skills, but at the expense of the accumulation of general skills. However, experience as a board member does not have this effect.

Suggested Citation

  • Kenjiro Hirata & Ayako Suzuki & Katsuya Takii, 2019. "How general is managerial human capital? : Evidence from the Retention of Managers after M&As," OSIPP Discussion Paper 19E010, Osaka School of International Public Policy, Osaka University.
  • Handle: RePEc:osp:wpaper:19e010
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    File URL: http://www.osipp.osaka-u.ac.jp/archives/DP/2019/DP2019E010.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Tenure; Managerial Skill; Managerial Turnover after M&As; Selection Bias; Cox Proportional Hazards Model;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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