Management Practices and Mergers and Acquisitions

55 Pages Posted: 6 Jul 2018 Last revised: 3 Aug 2018

See all articles by John (Jianqiu) Bai

John (Jianqiu) Bai

Northeastern University - D'Amore-McKim School of Business

Wang Jin

Massachusetts Institute of Technology (MIT)

Matthew Serfling

University of Tennessee

Date Written: July 5, 2018

Abstract

We provide new empirical evidence on the sources of value creation in mergers and acquisitions by using a dataset of establishment-level management practices from the U.S. Census Bureau. We find that firms with better management practices tend to acquire establishments with worse management practices, and following the acquisition, improve the target’s management practices. These improvements are larger when acquirers have a greater incentive and ability to make these changes and are also followed by increases in establishment performance. Overall, our findings suggest that spillovers of good management practices constitute an important source of synergies from mergers and acquisitions.

Keywords: Mergers and Acquisitions, Management Practices, Synergies, Value Creation

Suggested Citation

Bai, John (Jianqiu) and Jin, Wang and Serfling, Matthew, Management Practices and Mergers and Acquisitions (July 5, 2018). Available at SSRN: https://ssrn.com/abstract=3208988 or http://dx.doi.org/10.2139/ssrn.3208988

John (Jianqiu) Bai

Northeastern University - D'Amore-McKim School of Business ( email )

Boston, MA 02115
United States

Wang Jin

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Matthew Serfling (Contact Author)

University of Tennessee ( email )

Haslam College of Business
Knoxville, TN 37996
United States
865-974-1952 (Phone)

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