Mergers and Acquisitions, Technological Change and Inequality

61 Pages Posted: 13 Jun 2016 Last revised: 2 Jun 2019

See all articles by Wenting Ma

Wenting Ma

University of North Carolina at Chapel Hill

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: May 30, 2019

Abstract

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

Ma, Wenting and Ouimet, Paige and Simintzi, Elena, Mergers and Acquisitions, Technological Change and Inequality (May 30, 2019). 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

University of North Carolina at Chapel Hill ( email )

CB 3305, Gardner Hall
Chapel Hill, NC NC 27514
United States

HOME PAGE: http://econ.unc.edu/grads/wenting-ma/

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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