Do Wages Rise or Fall Following Merger?

16 Pages Posted: 16 Dec 2004

See all articles by Martin J. Conyon

Martin J. Conyon

Bentley University; Wharton School, Center for Human Resources

Sourafel Girma

Nottingham University Business School

Steve Thompson

University of Leicester - Department of Economics

Peter W Wright

University of Sheffield - Department of Economics

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Abstract

This paper provides a systematic empirical analysis of the effects of merger and acquisition activity on profitability and firm-level employee remuneration in the UK, using a specially constructed database for the period 1979-91. It finds that both profitability and wages rise following acquisition, and firms that merge within the same industry division experience larger increases in profitability and pay their workers higher wages than those engaged in unrelated acquisitions; i.e. in part, the result of an increase in the efficiency with which labour is used following related acquisition.

Suggested Citation

Conyon, Martin J. and Girma, Sourafel and Thompson, Steve and Wright, Peter W, Do Wages Rise or Fall Following Merger?. Available at SSRN: https://ssrn.com/abstract=625787

Martin J. Conyon (Contact Author)

Bentley University ( email )

175 Forest Street
Waltham, MA 02145
United States

Wharton School, Center for Human Resources ( email )

3600 Locust Walk
Philadelphia, PA 19104-6365
United States

Sourafel Girma

Nottingham University Business School ( email )

Jubilee Campus
Nottingham, NG8 1BB
United Kingdom
+44 0 115 8466656 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/~lizsmg/

Steve Thompson

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom
+44 116 252 2897 (Phone)

Peter W Wright

University of Sheffield - Department of Economics ( email )

9 Mappin Street
Sheffield, S1 4DT
UNITED KINGDOM

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