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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Dec 10, 2020

Mergers And Acquisitions, Technological Change And Inequality


Mergers and acquisitions (M&As) are an important mechanism through which new technology is adopted by firms. We document patterns of labor reallocation and wage changes following M&As, consistent with the adoption of technology. Specifically, we show target establishments invest more in technology, become less routine task intensive, employ a greater share of high technology workers, and pay more unequal wages. We document evidence for three non-mutually exclusive mechanisms underlying this effect: differences in the ability to integrate technology efficiently; agency conflicts; and, occupational scale. Moreover, the within-establishment patterns generalize to the industry-level, confirming the external validity of our findings.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals. 

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