Mergers and Acquisitions, Technological Change and Inequality

68 Pages Posted: 13 Jun 2016 Last revised: 7 Jan 2021

See all articles by Wenting Ma

Wenting Ma

Isenberg School of Management, UMass Amherst

Paige Ouimet

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Elena Simintzi

University of North Carolina Kenan-Flagler Business School; Centre for Economic Policy Research (CEPR)

Date Written: December 10, 2020

Abstract

Mergers and acquisitions (M&As) are an important mechanism through which new technology is adopted by firms. We document patterns of labor reallocation and wage changes following M&As, consistent with the adoption of technology. Specifically, we show target establishments invest more in technology, become less routine task intensive, employ a greater share of high technology workers, and pay more unequal wages. We document evidence for three non-mutually exclusive mechanisms underlying this effect: differences in the ability to integrate technology efficiently; agency conflicts; and, occupational scale. Moreover, the within-establishment patterns generalize to the industry-level, confirming the external validity of our findings.

Keywords: M&A, Occupational Change, Technological Change, Wage Inequality

JEL Classification: G34, J24, J31, O33

Suggested Citation

Ma, Wenting and Ouimet, Paige and Simintzi, Elena, Mergers and Acquisitions, Technological Change and Inequality (December 10, 2020). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 485/2016, Available at SSRN: https://ssrn.com/abstract=2793887 or http://dx.doi.org/10.2139/ssrn.2793887

Wenting Ma

Isenberg School of Management, UMass Amherst ( email )

650 North Pleasant Street
Amherst, MA 01003
United States

Paige Ouimet (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Elena Simintzi

University of North Carolina Kenan-Flagler Business School ( email )

McColl Building, Room 4200B
300 Kenan Center Drive
Chapel Hill, NC 27599-3490
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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