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Does Managerial Experience in a Target Firm Matter for the Retention of Managers after M&As?

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  • Kenjiro Hirata
  • Ayako Suzuki
  • Katsuya Takii

Abstract

This paper examines how managers' tenures in target firms influence their probability of retention as board members after mergers or acquisitions in Japanese firms. It develops a model that distinguishes several hypotheses about the effect of tenure on separation. Our results suggest that experience as an employee increases firm-specific skills, but at the expense of the ability to learn new skills. However, experience as a board member does not have this effect in Japanese firms, the structure of which is known to encourage specific skills. Further, we provide a novel method to correct for selection biases when using data on managers.

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  • Kenjiro Hirata & Ayako Suzuki & Katsuya Takii, 2016. "Does Managerial Experience in a Target Firm Matter for the Retention of Managers after M&As?," Working Papers e108, Tokyo Center for Economic Research.
    • Handle: RePEc:tcr:wpaper:e108
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    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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