Acquiring organizational capital
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › Not applicable › peer-review
Related Research Unit(s)
|Journal / Publication||Finance Research Letters|
|Early online date||5 Oct 2017|
|Publication status||Published - Jun 2018|
|Link to Scopus||https://www.scopus.com/record/display.uri?eid=2-s2.0-85031322991&origin=recordpage|
Organizational capital is the accumulation and use of private information to enhance economic efficiency for a firm. Theory has argued that organizational capital is typically embodied in employees and the organizational structure, and is hard to transfer across organizations. In this paper, we study whether organizational capital is transferable across firms via mergers. The evidence shows that acquirers gain more from acquiring firms with higher organizational capital and acquirers are also willing to pay a higher premium for higher organizational capital targets. The evidence suggests that acquiring higher organizational capital targets creates synergies which are shared between acquirers and targets.
- Abnormal returns, Mergers and acquisitions, Organizational capital, Synergy
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