Mergers and Acquisitions, Technological Change and Inequality
64 Pages Posted: 13 Jun 2016 Last revised: 4 Nov 2018
Date Written: October 17, 2018
We document shifts in occupational composition following mergers and acquisitions (M&As) along with increases in average wages and wage inequality. We propose M&As act as a catalyst for technological change. Due to an increase in scale, improved efficiency and lower financial constraints, M&As facilitate technology adoption, disproportionately increasing the productivity of high-skill workers and enabling the displacement of mid-income routine occupations. We document these findings in M&A impacted establishments as compared to a matched sample of control establishments. These results generalize within industries, suggesting M&A activity is an important driver of economy-wide trends in job polarization and income inequality.
Keywords: mergers, technological change, inequality
JEL Classification: G34, J2, J21, J31, D31
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