Premium
An Empirical Analysis of Post‐Merger Organizational Integration
Author(s) -
Smeets Valerie,
Ierulli Kathryn,
Gibbs Michael
Publication year - 2016
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/sjoe.12161
Subject(s) - workforce , business , key (lock) , turnover , labour economics , industrial organization , set (abstract data type) , economics , marketing , management , economic growth , computer science , computer security , programming language
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.