Mergers and Acquisitions, Technological Change and Inequality
67 Pages Posted: 13 Jun 2016 Last revised: 20 Nov 2019
Date Written: May 30, 2019
We document firm-level changes following mergers and acquisitions (M&As) which mirror aggregate shifts in the US labor market observed in response to greater use of automation. Specifically, we show post M&A establishments become less routine task intensive, more high-skilled, and pay more unequal wages. Besides the labor market outcomes, we show that investment in IT increases following M&As. The key channel that explains technology adoption following M&As is an increase in occupational scale that reduces the fixed cost of investing in technology. We also find suggestive evidence that agency and financial constraints may play a role towards explaining our findings.
Keywords: mergers, technological change, inequality
JEL Classification: G34, J2, J21, J31, D31
Suggested Citation: Suggested Citation