An Empirical Analysis of Post‐Merger Organizational Integration

31 Pages Posted: 28 Jun 2016

See all articles by Valérie Smeets

Valérie Smeets

Aarhus School of Business; Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Kathryn Ierulli

University of Chicago

Michael Gibbs

University of Chicago Booth School of Business; Institute for the Study of Labor (IZA)

Date Written: July 2016

Abstract

We study post‐merger organizational integration using linked employer–employee data. Integration is implemented by reassigning a small number of high‐skilled workers, especially in R&D and management. Workforce mixing is concentrated to establishments set up after merger, rather than to previously existing establishments. Worker turnover is high after merger, but new hiring yields stable total employment. Target employees have higher turnover and reassignment, particularly if the target firm is small relative to the acquiring firm. These findings might suggest that integration is costly, but can be achieved by focusing on key employees. Alternatively, the reassignment of a few key employees is sufficient for achieving integration.

Keywords: Merger, organizational integration

JEL Classification: D22, G34, J21, L23, M5, M10

Suggested Citation

Smeets, Valérie and Ierulli, Kathryn and Gibbs, Michael, An Empirical Analysis of Post‐Merger Organizational Integration (July 2016). The Scandinavian Journal of Economics, Vol. 118, Issue 3, pp. 463-493, 2016, Available at SSRN: https://ssrn.com/abstract=2801367 or http://dx.doi.org/10.1111/sjoe.12161

Valérie Smeets (Contact Author)

Aarhus School of Business ( email )

Haslegaardsvej 10
DK-8210 Aarhus, 8210
Denmark

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

Kathryn Ierulli

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Michael Gibbs

University of Chicago Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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