Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus
No 06-8:
Mergers of Equals & Unequals
Valérie Smeets ()
, Kathryn Ierulli ()
and Michael Gibbs ()
Abstract: We examine the organizational dynamics of integration post
merger. 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. The results are consistent with the basic
hypothesis.
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 operations decreases turnover. This finding is inconsistent with
the view
that workers of the two firms may be better substitutes for
each other. However, the 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
Keywords: Mergers; internal organization; conflicts; personnel economics; (follow links to similar papers)
JEL-Codes: G34; J63; M14; (follow links to similar papers)
36 pages, January 1, 2006
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Downloadable files:
06-8_vas.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Helle Vinbaek Stenholt ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design Joakim Ekebom
