Mergers and Acquisitions, Technological Change and Inequality

Mergers and Acquisitions, Technological Change and Inequality

Wenting Ma, Paige Ouimet, Elena Simintzi

Series number :

Serial Number: 
485/2016

Date posted :

March 12 2018

Last revised :

July 04 2019
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Keywords

  • Mergers • 
  • technological change • 
  • inequality

We document firm-level changes following mergers and acquisitions (M&As) which mirror aggregate shifts in the US labor market observed in response to greater use of automation. Specifically, we show post M&A establishments become less routine task intensive, more high-skilled, and pay more unequal wages.

Besides the labor market outcomes, we show that investment in IT increases following M&As. The key channel that explains technology adoption following M&As is an increase in occupational scale that reduces the fixed cost of investing in technology. We also find suggestive evidence that agency and financial constraints may play a role towards explaining our findings.

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Authors

Ms.
Real name:
Wenting Ma
University of North Carolina at Chapel Hill
Professor
Real name:
Paige Ouimet
University of North Carolina at Chapel Hill
Real name:
Elena Simintzi
UBC Sauder