Department of Economics and Business Economics

An Empirical Analysis of Post-Merger Organizational Integration

Publication: Research - peer-reviewJournal article

DOI

  • Valerie Anne Rolande Smeets
  • Kathryn Ierulli
    Kathryn IerulliUniversity of Chicago, GSBUnited States
  • Michael Gibbs
    Michael GibbsUniversity of Chicago GSB & IZAUnited States
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 may suggest integration is costly, but can be achieved by focusing on key employees. Alternatively, reassigning a few key employees is sufficient for achieving integration.
Original languageEnglish
JournalThe Scandinavian Journal of Economics
Volume118
Issue number3
Pages (from-to)463-493
Number of pages31
ISSN0347-0520
DOIs
StatePublished - 2016

    Keywords

  • Merger, Organizational integration

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